Brazil’s Central Bank has quietly defused a time bomb ticking at the core of its financial system: the growing reliance of mid-sized and digital lenders on deposits guaranteed by the Credit Guarantee Fund (FGC). The new rules apply the brakes to the CDB boom à la Banco Master — products lavishly distributed across digital platforms.
Banco Master shows what the regulator hopes to avoid. In a few years, the lender became one of the biggest issuers of FGC-backed deposits, raising tens of billions of reais through online marketplaces and offering as much as 150 per cent of the CDI. The model looked solid but was built on shaky ground: more than four-fifths of liabilities were insured deposits. A sudden loss of confidence could have forced the FGC to intervene on an unprecedented scale, spilling stress into peers that rely on the same channels.
To curb such excesses, the Central Bank introduced what supervision director Ailton Aquino called a “double brake” in the FGC framework, unveiled during a press briefing in São Paulo on November 12. The first — the speed bump — lowers the tolerance threshold, forcing banks to pay extra into the fund earlier when they accelerate too hard on guaranteed funding. The second — the parking zone — compels them to post government bonds once leverage exceeds ten times adjusted equity.
The measure is pre-emptive, covering 28 lenders among some 250 participants. A few must post collateral for the first time since the fund’s creation in 1995. The FGC thus shifts from safety net to prudential instrument, part of the regulator’s toolkit for defusing risks before they explode.
The backdrop is the same: the rise of investment platforms. They have opened the gates of the capital market to retail investors — from fixed income and structured notes to funds and equities. Yet their reach has concentrated funding flows into the hands of a few distributors — a new kind of systemic dependency, faster and less visible than before.
The Central Bank does not name names, but the market knows who rules retail funding: Bradesco, Itaú, BTG Pactual, XP, Nubank and Safra.
According to the Financial Stability Report, platform-based funding has doubled in two years to about R$250bn, and more than a dozen banks now rely on it for over 80 per cent of their funding. Speed and concentration make these channels both efficient and fragile — a blessing in calm waters, a curse in storms.
Just recall the structured notes linked to Ambipar and Braskem: legitimate products that, once mass-marketed without proper warnings, inflicted losses on retail investors. The problem is not the instrument but the creativity that sells it.
The Central Bank has installed its speed bumps to prevent skids — and reminded markets that, in times of abundant liquidity and imagination, prudence remains monetary policy.
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