Bank Merger in Brazil Should Reduce Credit Shortage, Says Minister

Finance Minister of Brazil Guido Mantega Guido Mantega, Brazil's minister of Finance, believes that the merger of Brazilian banks Itaú and Unibanco, is important because it will make the two institutions more solid. According to him, it is normal, at a moment of turbulence and problems in the international financial sector, for a move such as the one made by the two banks to happen.

"These are two traditional, solid banks that contribute to economic activity, therefore I believe that it is important right now for them to join forces, in order to continue making more credit available," he said.

Regarding the concentration in the sector, the minister stated that despite the reduced liquidity and some other problems, the banking sector in Brazil should remain roughly the same – with 10 to 15 relevant banks, and then the minor ones.

"There are going to be a few changes, but not many, because the sector is already concentrated. The most important thing is that this concentration is aimed at strengthening the financial system," he said.

The minister also stated that the merger might lead to a larger volume of credit available in the financial market. One of the complaints of the economic team concerns precisely the retention of funds by banks when faced with the crisis.

"I believe that it is favorable, because it strengthens the institutions. Even though they are already strong, renowned and traditional, they are going to have greater financial power, in addition to becoming one of the largest institutions. The Itaú-Unibanco Holding is going to rank among the world's largest," said Mantega.

With regard to the loss of leadership of the Bank of Brazil within the Brazilian banking system, the minister stated that the change in ranking may be temporary, and that the fact is not important. "That's life. There is nothing like one day after another. The Bank of Brazil will also have a chance to run for its money and re-establish itself," he said.

To the minister, the fact that the state-owned bank has become second in the ranking is not too important, because at a moment in which funds are scarce, the Bank of Brazil has lived up to its role of providing greater liquidity (availability of cash), even more than it normally would. "It is not relevant whether it is the first, the second or the third. But I assure you that it [Bank of Brazil] will continue to grow."

ABr

Tags:

Ads

You May Also Like

Brazilian Emigrants Send US$ 6.4 billion Back Home. Only Mexicans Send More.

Funds sent to relatives of Latin American and Caribbean workers who live abroad broke ...

After Telling Israelis He Has Peace Virus Lula Urges Them to Invest in Brazil

In the Middle East right now and determined to be one of the mediators ...

Lack of Hygiene in Hospitals in Brasília Kills 22 People

After the death of four more people victims of the KPC superbacteria in Brazil’s ...

Alcântara Base in the state of Maranhão, in the Brazilian Northeast

Brazil to Enter Satellite Launching Market With Ukraine’s Help

The Brazilian government has informed that a joint venture company for rockets and satellites, ...

Brazilian Northeast's mother and kids

Brazil’s Birthrate Falls from 6.2 to 2.3 Kids Per Woman

In the last 60 years, Brazilians have increased their life expectancy in almost 30 ...

Comparing Discriminatory Policing and Social Action in Brazil and the US

The disproportionately harsh and violent treatment of African-Americans by law enforcement officials has been ...

World Hunger: Blame It on Farm Subsidies and Oil Prices, Says Brazil

During his current visit to Ghana, in Africa, Brazilian President, Luiz Inácio Lula da ...

In Brazil, Teaching the Koran in the Original

In the corridors of the Brazilian Islamic School, in the Vila Carrão neighborhood in ...

Russian-made Sukhoi (SU-30) fighter jet

Russia’s Weapon Peddling in Brazil and LatAm Is a Thriving Business

In recent years, the Russian Federation has become one of the major weapon suppliers ...

Chile Accuses Brazil of Slamming Doors on Tourism for Its Swine Flu Policy

Brazilian government advice against traveling to A/H1N1 virus flu-stricken Argentina and Chile by people ...