The role of the Banco Central do Brasil (BCB)

The purchasing power stability of the Brazilian currency and the soundness of the financial system are the main BCB's institutional objectives.

As set forth by Resolution 2,882 , it is BCB’s responsability to promote the soundness, the normal functioning and the improvement of the Brazilian payments system (SPB).

BCB is also responsible for authorizing and overseeing clearing and settlement systems, including those that settle securities, foreign exchange and derivatives transactions1.

Additionally, according to Law 10,214 , BCB should define which settlement systems are systemically important2.

BCB also operates the Reserves Transfer System (STR) and the Special System for Settlement and Custody (SELIC), respectively a funds transfer system and a government securities settlement system.

As the manager and the operator of the STR, system where all the financial obligations are finally settled, BCB must:
        • execute funds transfer orders;
        • ensure the system continuous functioning, with a minimum availability index of 99.8%;
        • comply with the legal provisions of confidentiality;
        • supply participants with timely information on the system’s performance.

BCB can, at its own discretion, suspend or exclude participants that pose risk to the smooth functioning of the national financial system, or to the STR or that do not operate in compliance with the STR’s rules or the national financial system regulation.

To ensure a smooth performance of the real-time settlement environment, the BCB offers collateralized, free of charge intraday credit facility to the reserves account holders.

1Systems that settle securities are under the BCB and the Securities and Exchange Commission (CVM) joint supervision, but aspects related to systemic risk are exclusively assessed by the BCB. Systems that settle both government securities or securities issued by banks are are under exclusive supervision of the BCB.

2Systemically important systems: settlement systems whose volume and nature, at BCB discretion, may create risks to the strength and to the smooth functioning of the Brazilian financial system.