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Big banks in Brazil agree to extend debt and CMN facilitates credit in response to coronavirus


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The Brazilian banking sector announced on Monday (16) measures that aim at least to mitigate the effects of the coronavirus pandemic, which also contaminates the global and national economy.

The acts aim to facilitate the renegotiation of debts and the granting of credit. In this way, they free up more money to circulate in the market and relieve pressure on the budget of families and companies.

The five largest banking institutions in the country – Bradesco, Itaú, Banco do Brasil (BB), Caixa Econômica Federal and Santander – said that "they are open and committed to meeting requests for a 60-day extension of debt maturities".

The measure is valid for individuals and companies (micro and small companies) with loans in force and that are up to date.

"Banks are committed to continue collaborating with the country with measures to stimulate the economy," says a note from Febraban (Brazilian Federation of Banks), which released the measure.

Also on Friday (13), Caixa Econômica Federal and Banco do Brasil – both public – had already announced measures to facilitate the granting of credit to companies. While Caixa provided credit lines totaling R $ 75 billion for the productive sector, BB announced a total opening to meet the demands of customers, especially small and medium-sized companies.

Credit enhancement

Also on Monday, the National Monetary Council (CMN) announced two measures that increase credit and aim to mitigate the effects of the coronavirus pandemic on the economy.

The CMN is formed by the Minister of Economy, Paulo Guedes, the President of the Central Bank (BC), Roberto Campos Neto, and the Secretary of Finance of the Ministry of Economy, Waldery Rodrigues.

One of these measures reduces the Main Capital Conservation Additional (ACPConservação) from 2.5% to 1.25% for one year. This fee is a kind of “resource cushion” required from banks to ensure liquidity.

This cut allows banks to maintain or even expand their credit granting plans. According to a report released by the Central Bank (BC), the action will increase the capital slack in the financial system by R $ 56 billion. And that allows, still according to the BC, “to increase the credit granting capacity around R $ 637 billion”.

CMN also announced the facilitation of renegotiation of credit operations by companies and families recognized as good payers.

The estimate of the national monetary authorities is that approximately R $ 3.2 trillion of credits are eligible to benefit from this measure. The negotiation, however, will depend on the interest and convenience of the parties involved.

“Both measures are proactive and will facilitate countercyclical action by the National Financial System, which will help companies and families to face the effects of COVID-19. These are measures that are in line with the other actions of the Federal Government and other international financial regulators ”, says the BC report.

Not even gold and bitcoin escape

The global crisis generated by the spread of the coronavirus has melted stock exchanges around the world and affected even assets considered “reserves of value”, such as gold and bitcoin itself.

After reaching its historic high of $ 1,700 last week, up 12% year on year, gold delivered half of its earnings and, last Thursday (12), traded in the $ 1,600 range.

The most well-known of the cryptocurrencies was even more affected by the market bump last Thursday. The asset dropped by 50% in one day and raised a series of questions as to whether it would indeed be a "digital gold".

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