The central bank should maintain the downward trend in interest rates
Hey central bank Approved a new decision aimed at unifying the precautionary treatment of exposures Court orders By banks. While the Ministry of Finance The European Central Bank is seeking to find solutions to repay these debts without affecting the primary goal, and the central bank has noted a recent increase in the volume of court orders on the balance sheets of financial institutions. Current exposure to the national financial system (SFN) precatório less than 0.1% of assets, according to the monetary authority. BC’s new regulations consider both judgments already issued and credit rights arising from final, non-appealable judgments that are in the process of enforcement, known as advance judgments. However, stocks that are still in the awareness stage will not receive prudential treatment, as they are not recognized in banks’ balance sheets.
The decision states that court orders obtained after June 30, 2023 will be subject to specific requirements. Up to a maximum of 10% of the principal capital, exposure to court orders with the consortium as debtor will receive a factor risk weighting (FPR) of 100%, while exposure to court orders with subnational entities as debtors will receive a risk weighting factor (FPR) of 150%. The pre-trial exposure will have an interest rate of 200% when the debtor is the federation and 300% when it is another federal entity. If the total of these assets exceeds 10% of the foundation’s principal capital, the surplus will be subject to an FPR of 600% for court orders and 1,250% for judgment, regardless of the debtor entity. The Colombia Committee emphasizes that Brazil follows the recommendations of the Basel Committee on Banking Supervision (BCBS) in the scope of prudential regulation, but highlights the importance of diligent work by domestic authorities to continuously adapt prudential rules in the face of new and emerging assets. Risks. The new regulations will come into effect on January 1, 2024.
