Three questions to

the Minister of Finances, Guido Mantega (made by Época maganize)

 

What is your evaluation of the government’s first year?

We made it through the international economic crisis with relative ease and we met out economic and social targets. We implemented a new model of development, with focus on job generation. Even with a smaller economic growth than in 2010, we created more than 2 million formal jobs. In a moment where the world is full of unemployment, with more than 100 million unemployed people, this is a great accomplishment. Of course, the crisis is not over and is slowing us down.

 

Don’t you think that the number of ministries and trusted positions is outrageous?

There are ministries who attend to important social issues; for example the Ministry of Racial Equality who focus mainly on reducing prejudice and inequality and the Special Secretariat for Women Policies, which deals with the feminine condition. Both are small ministries.

 

Do you fell that President Dilma wants to reduce the number of ministries?

President Dilma will maintain the number of ministries.

The House of Representatives approved last night the MP 442/08, which gives the Central Bank the power to accept the credit portfolios of banks facing difficulties with liquidity as guarantees of loans. The BC is also authorized to lend directly from the nation’s international reserves (around 200 billion dollars) to banks that finance exporting companies. The measure is now being analyzed by the Senate.

 

The text was approved with changes. The reporter, Representative Rodrigo Rocha Loures (PMDB-PR), highlighted four of the seventy-four amendments presented. One of the changes is that the BC has to send every trimester a report to the Congress including: the total value for the trimester and the value accumulated for the year of the loans; the financial conditions of the applied measures (discount and spread, for example); the accumulated value – annually and Quarterly – of credit (paid on time or late); and an explanation of the impact these operations described in the BC’s results.

 

This information will be debated at the Biannual meeting that occurs between lawmakers and the president of the BC, as outlined by the Fiscal Responsibility Law (Complementary Law 101/00).

 

The national monetary aid comes in the following form: a bank having difficulty capturing money on the market, but has a low risk credit portfolios, can “sell it” to the BC with the agreement to repurchase it, as a loaning operation known as rediscount. The credit portfolios are composed of values that the bank have the right to receive, in the form of legal and individual debts.

 

From the value of this credit, the provision (value to cover the debt should the credit not be honored) will be deducted. What remains will have a discount (percentage variable according to the credit’s evaluation) applied to it.

 

Additionally, the BC will be able to accept a physical guarantee (property, for example) or financial one given by the controlling stock holder of a united company or other bank.

 

The text approved by the House of Representatives also stipulates that there are transparent rules and not discrimination for the acceptance of actions in a rediscount operation.

 

In November, the House of Representatives should vote a second MP against the crisis: 443/08, which authorizes the BC and Caixa to purchase banks having difficulties.

 
Welcome! Latin America is becoming consistently more important for the world. As the region becomes more stable, the world sees Latin America as a potential business area. In order to understand te potential Latin America has to offer, the world must understand the unique dynamics that the local politics function. This blog already exists in Portuguese since 2005 and is widely read. I believe it can be an important instrument to understand this amazing region. Suggestions, criticisms and opinions are welcome. + learn more

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