CMN and BC adopt measures of macroprudential nature

03/12/2010 8:20:00 AM

Brasília – The National Monetary Council (CMN) and the Board of Governors of the Banco Central (BC) adopted a set of measures of macroprudential nature in order to improve the existing regulatory tools, maintain the stability of the National Financial System (SFN) and allow the continuity of the sustainable credit market development. The initiatives are also aimed at continuing the process of gradual withdrawal of the incentives introduced to minimize the effects of the 2008 international financial crisis.

The measures adopted are the following:
 
Increase of the capital requirement for credit operations to individuals with tenures over 24 months, including exceptions:
• The Risk Weighting Factor (FPR) increases from 100% to 150% in most of the credit operations to individuals with tenures over 24 months, which means that the financial institutions’ capital requirement of the will increase from the current 11% to 16.5% of the operation value. In the case of payroll-deducted loans, the rule only applies on the operations with tenures over 36 months.
• The increase will have an effect on the vehicles financing or vehicles leasing operations on the following situations:
         • Tenure between 24 and 36 months: when the initial installment is below 20% the value of the good.
         • Tenure between 36 and 48 months: when the initial installment is below 30% of the value of the good.
         • Tenure between 48 and 60 months: when the initial installment is below 40% of the value of the good.
• The FPR increase does not apply on rural credit operations, on housing credit operations and on the financing or leasing operations of heavy vehicles.

Elevation of the reserve requirement over demand and time deposits:
• The additional reserve requirement over demand and time deposits will increase from 8% to 12%. The limit of deduction of the additional reserve requirement over demand and time deposits of the financial institutions with reference equity below R$ 2 billion will increase from R$ 2 billion to R$ 2.5 billion. For the institutions with equity equal or over R$ 2 billion and below R$ 5 billion, the deduction will change from R$ 1.5 billion to R$ 2 billion.
• The reserve requirement over time deposits will increase from 15% to 20%. The limit of deduction of the reserve requirement over time deposits of the financial institutions with reference equity below R$ 2 billion will increase from R$ 2 billion to R$ 3 billion. For the institutions with equity equal or over R$ 2 billion and below R$ 5 billion, the deduction will increase from R$ 1.5 billion to R$ 2,5 billion.
• The changes in the rules of reserve requirement collection will cause an impact of R$ 61 billion.
• The upper limit of deduction of the purchases of credit portfolios and interfinancial deposits will be reduced from 45% to 36% of the reserve requirement over time deposits. The tenure of these deductions was extended from December 31 to June 30, 2011.
• The issuance of Financial Bills starts to be exempted from reserve requirement. The reserve requirement over that security was the same applied over time deposits.

 Expansion of the limit for the insurance granted by the FGC and establishment of schedule for the extinction of the DPGE:
• The CMN established a schedule of gradual reduction of the deposits volume that the financial institutions can issue with the special insurance granted by the Depositor Insurance Fund (FGC).
The reduction begins on January 2012, at a pace of 20% per year, up to January 2016, when the possibility of new funding operations with this type of insurance will be extinct.
• The insurance limit of deposits and credit granted by the FGC will increase from R$ 60 thousand to R$ 70 thousand, for each depositor.

Brasília, December 3, 2010.

Banco Central do Brasil
Press Secretary
imprensa@bcb.gov.br
+55 (61) 3414-3462