Big Changes in Brazil's Financial Watchdog

Brazil's finance chief, Fernando Haddad, is pushing for a major shift in how the country's investment funds are overseen. He wants the central bank to take on this role, which is currently handled by the CVM, the securities regulator. This idea is still up for discussion among key government bodies, including the central bank, the Management Ministry, and the solicitor general's office. The push for change comes after some shady dealings involving Banco Master, a bank that was shut down last November. Investigators have found that complex investment funds might have played a part in the bank's troubles. Haddad admits that the situation is serious but insists it doesn't threaten Brazil's entire financial system.Haddad also pointed out that the current central bank governor, Gabriel Galipolo, has had to deal with a lot of issues left behind by his predecessor, Roberto Campos Neto. These problems include the Banco Master mess and the fact that people are starting to worry about inflation getting out of control. Campos Neto was appointed by the previous president, Jair Bolsonaro, and served during the early years of Luiz Inacio Lula da Silva's current term. Galipolo took over in January 2025. On a brighter note, Haddad thinks there's room to lower interest rates, which have been stuck at a near 20-year high of 15% since July. He also mentioned that the central bank is working on rebuilding and diversifying its foreign exchange reserves.