The Central Bank of Brazil published a note on the International Monetary Fund's Financial System Stability Assessment under the Financial Sector Assessment Program, which found Brazil's financial system remains solid and resilient even under adverse economic and financial scenarios. The assessment points to major changes since the 2018 review, including greater digitalization, new financial entrants, stronger capital markets and regulatory modernization, which it links to more competition, higher efficiency and broader financial inclusion. It also highlights Pix as a key driver of the digitalization of financial services in Brazil. Stress tests indicated that Brazilian banks can absorb losses even in severe downturn scenarios, with systemically important banks remaining above minimum regulatory capital requirements despite capital declines in extreme cases. The review also found liquidity risks manageable and the insurance sector generally able to withstand significant shocks. Alongside that positive assessment, the IMF recommended stronger institutional arrangements for supervision, including greater budgetary, financial and administrative autonomy for the Central Bank of Brazil, stronger staffing across regulatory and supervisory bodies and better legal protection for their staff. It also reiterated the need to modernize the bank resolution legal framework and called for stronger monitoring of emerging risks linked to digitalization, capital market growth, cryptoassets and nonbank financial institutions, as well as continued development of macroprudential tools.
Central Bank of Brazil2026-07-24
Central Bank of Brazil highlights IMF assessment finding the financial system resilient, with calls for stronger supervisory autonomy and updated resolution tools
The Central Bank of Brazil highlighted an IMF assessment that found Brazil's financial system remains resilient under adverse scenarios, with banks able to absorb losses and systemically important lenders staying above minimum capital requirements. The review also pointed to gains from digitalization and Pix, while recommending greater supervisory autonomy, stronger staffing, legal protection for officials and modernization of the bank resolution framework.