Brazil Weighs FGC Overhaul After Master Liquidations Drain About R$52 Billion

Overview

• Liquidations linked to Banco Master, including Will Bank and Pleno, have drawn roughly R$51.8–52 billion from the deposit insurance fund, equal to about 40% of available resources.
• Major banks are negotiating with the Central Bank on a framework that includes risk-based funding for the FGC and tougher oversight for smaller lenders to curb high‑risk strategies.
• Distribution platforms that sell smaller banks’ CDBs could be required to certify product risks and increase their contributions to the fund.
• Senator Renan Calheiros filed a bill to codify FGC rules, authorize liquidity assistance, enable progressive extra contributions, require liquid‑asset buffers, and allow caps on deposit rates above prudent limits.
• The Brazilian Association of Banks expressed cautious support for stronger legal footing for the Central Bank while warning that congressional amendments could distort the proposal.