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DF Governor Says Central Bank Talks Point to Technical Rescue for BRB

The leading fix under discussion uses a R$6.6 billion credit line from the deposit insurance fund with a possible federal guarantee.

Overview

  • Celina Leão, who met Central Bank president Gabriel Galípolo on Thursday with BRB chief Nelson de Souza, said liquidation is off the table and a technical fix is underway, adding that customers should not worry about their accounts.
  • The current plan centers on a roughly R$6.6 billion loan from the Credit Guarantee Fund and partner banks, which could get cheaper if the National Treasury agrees to guarantee it.
  • The deal is not closed as the DF government compiles data the Treasury requested after calling its guarantee filing incomplete, and Leão is seeking an audience with President Lula.
  • Local lawmakers have authorized the loan, yet opposition lawsuits aim to block the package, and without a federal guarantee the DF government’s own assets would secure the borrowing.
  • The crisis stems from BRB’s R$12.2 billion purchase of Master-linked loan portfolios flagged for fraud, with about R$6 billion deemed hard to collect, and police have arrested former president Paulo Henrique Costa over alleged real-estate kickbacks tied to the deals.