Overview
- The Supreme Federal Court scheduled a conciliation hearing for August 13 to try to implement a May agreement that would let the Distrito Federal borrow R$6.6 billion from the FGC to recapitalize state-controlled BRB.
- Finance Minister Dario Durigan publicly called the GDF’s accusation of federal 'inertia' unfounded and said federal teams have worked on the deal but need a credible BRB/GDF business and recovery plan for the FGC and banks to evaluate.
- Private banks have resisted joining the guarantee syndicate envisioned in the May agreement, with some asking that Banco do Brasil and Caixa provide extra guarantees a federal team says would be unworkable for their balance sheets.
- Technical and legal hurdles remain, including the need to change PAF limits to allow the DF to take a loan far larger than the current roughly R$900 million cap and unresolved doubts over whether R$6.6 billion is sufficient to restore BRB’s capital.
- The dispute follows a criminal probe into BRB’s dealings with Banco Master that left an estimated R$8.8 billion of bad exposure, has delayed BRB’s 2025 financial statements, and risks further liquidity pressure on the bank and public finances if the recapitalization stalls.