Financial regulation and the Brazilian response to the 2008–09 financial crisis
This chapter presents the main features of Brazil's financial regulation and to show how they helped the economy to deal with the consequences of the 2008-09 financial meltdown. The first crucial ingredient of Brazil's response to the financial crisis was the country's international reserves. The second crucial factor in Brazil's successful response to the 2008-09 crisis was, ironically, the countrys high reserve requirements on banks. Enter the third crucial component of Brazil's successful response to the 2008-09 financial crisis: the existence of public commercial banks to keep liquidity within the domestic financial system and, more importantly, to act in a counter-cyclical way. The fourth reason for Brazil's relative success in dealing with the financial crisis is the existence of a national development bank, the Brazilian Development Bank, which is fully owned by the federal government and through which the Brazilian Treasury could finance private agents in periods of financial turmoil.