Banco Central Do Brasil

In 1964, the Banking Law (No. 4,595) created the National Monetary Council (CMN) — as the highest macroeconomic and financial regulatory authority — and the Banco Central do Brasil (BCB). Under this institutional framework, BCB performs its functions as monetary, regulatory and supervisory authority in accordance with guidelines issued by the CMN. It is worthy to highlight that the BCB's Governor has one of three votes in every deliberation of the CMN.

To ensure the stability of the currency purchasing power, to foster a sound, efficient and competitive financial system, and to promote the economic well-being of society.

With regard to price stability, the BCB considers that the best contribution of monetary policy to sustainable economic growth, low unemployment and improvement in people's living conditions is keeping inflation low, stable and predictable — in line with the international and domestic experiences.

In parallel, BCB defines financial stability as the regular operation, over time and in any economic scenario, of the system responsible for the financial intermediation among households, non-financial corporations, and the government.

The BCB's regulatory prerogative as financial supervisor is shared with the Brazilian Securities Commission (CVM), in accordance with their respective regulatory scopes.

Governance framework

Going beyond pursuing the proper management and organizational arrangements, the good governance of a public institution also depends on other three pillars: accountable autonomy, transparency and integrity. The pillars must reinforce each other and the weakness of one of them impairs the effectiveness of the others. 

Concretely, elements of operational autonomy of Banco Central do Brasil (BCB) are built in its formal relationship with the National Treasury , while hard legislation and the Institution's communication strategy strengthen the BCB's accountability and transparency arrangements. The pillar of integrity  is cemented in a comprehensive range of legal provisions, regulations and internal rules. 

Alongside, BCB maintains a broad range of institutional connections—whether bilateral or multilateral—in domestic and international jurisdictions.

The BCB considers that the continuous enhancement of its governance and institutional connections is crucial for effectiveness of its policies, which are performed to promote macroeconomic and financial stability and, ultimately, a higher society's welfare.

Policy-making framework

All powers of the BCB are vested in the Board of Governors. In accordance with the guidelines issued by the National Monetary Council (CMN) , the Board formulates and carries out the policies and functions necessary for the fulfillment of the BCB's institutional mission. Crucially, the Board's members must enjoy an unblemished reputation and notorious expertise in economic and financial matters, as required by law.

Precisely, the following BCB's councils work with the same composition as the Board of Governors:

• Monetary Policy Committee ( Copom ) – every 45 days, it sets the policy interest rate (Selic rate) in order to meet the inflation target.

• Financial Stability Committee ( Comef ) – it defines the value of the Countercyclical Capital Buffer in quarterly meetings.

• Governance, Risk and Control Committee ( GRC ) – it establishes the international reserves' management criteria and exceeds its performance.

The other collegiate bodies within the BCB are the Ethics Committee of the BCB (CEBCB); the Committee for Sanctioning Administrative Procedure and Term of Commitment (Copat); the Committee on Administrative Agreement within the Process of Supervision (Coaps) and the Decision and Appeal Committee (Coder).

Corporate management issues

Basically, the BCB operates under a multi-year ' Strategic Planning ', which guidelines—issued by its Board of Governors—define the macroprocesses and strategic projects and seek the efficient use of resources.

In line with the best international practices, BCB applies an integrated approach ( Enterprise Risk Management – ERM) that manages risks by taking into account their distinct dimensions—such as financial, operational, strategic, reputational and legal. 

Additionally, as an instrument of management support, the Cost and Managerial Information System (' Cost System ') assesses the costs of the BCB's activities. The 'Cost System' delivers a comprehensive tracking of the costs of services, activity processes and macroprocesses, allowing managers to apply better guidelines for organizational efforts and assign resources to activities that aggregate higher value to the society.

Go to https://www.bcb.gov.br/en/financialstability/regulation  and navigate to the "Find out the institutions in each Segment" section. You will see five buttons representing five segments based on the ratio of "Total exposure of a financial institution to Brazilian GDP." Click on one of the buttons, and a chart will appear showing the registered firms.

rdr@bcb.gov.br