The collapse of Banco Master has carved a hole of more than R$40 billion in Brazil’s Deposit Guarantee Fund (FGC), yet the country still avoids naming the root of the problem: the entire financial system was lenient. The Central Bank under Roberto Campos Neto was lenient, the FGC was lenient, the banks were lenient, the financial press clustered around Faria Lima was lenient — and even the platforms that sold 150%-of-CDI CDBs, and continue to market products paying 200% or more, engaged in a particularly profitable form of voluntary blindness. The prevailing narrative invokes “FGC-guaranteed CDBs,” “loan-portfolio origination,” or the “deadlock with Banco de Brasília.” All true. But taken together, these explanations avoid the larger truth: no one wanted to stop the flow while the flow was lucrative.
Febraban moved along the moral shoulder of the industry: publicly austere, privately claiming to have “issued warnings.” But private warnings are not accountability — they are cover. Now that banks must replenish the FGC, the quiet criticism of Campos Neto’s Central Bank resembles the regret of institutions that tolerated excess until tolerance became costly. And even then, boundaries remain. A significant part of the system continues to hold Campos Neto in high regard, especially within the digital-platform ecosystem (Nubank), where he is treated as a patron of fintechs and their tax agenda. Criticizing the Central Bank’s leniency without acknowledging this core of influence is, in practice, an admission of the institutional capture the sector accepts — and those involved operate within that capture with complete ease.
The philosophical dimension is unavoidable. The Master case embodies Karl Popper’s “paradox of tolerance” in its most pragmatic form: institutions tolerate deviations as long as they profit from them — until the deviation becomes too large to absorb, and surprise becomes the official posture. It is this permissive environment that now elevates figures like “outsider” Daniel Vorcaro, capturing public attention with his long-range jets, lavish parties and sprawling properties.
The episode reveals the true boundary of financial tolerance in Brazil: broad enough to allow distortions, narrow enough to punish everyone when the narrative collapses. The public silence of Febraban, the FGC’s belated concern, the calibrated criticism of Campos Neto’s Central Bank, the dutiful alignment of the Faria Lima press, and the indulgence of fundraising and distribution platforms form an implicit admission. Everyone saw. Everyone tolerated. Everyone profited — except the unsuspecting investors with exposure above the FGC limit, or the public-sector workers whose savings were mishandled by bad-faith managers. Now the more-than-R$40-billion bill exposes the actual cost of this tolerance — a cost that, as always, few are willing to acknowledge.
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