Brazil’s Central Bank Probes Master Case, Zeroes In on Campos Neto Era

By Brazil Stock Guide – An internal audit opened by the Banco Central do Brasil into the collapse of Banco Master is squarely focused on actions—and omissions—taken during the tenure of former governor Roberto Campos Neto, now an executive at Nubank (NYSE: NU). The stated priority is not the defenses mounted by former executives of the failed lender, but whether supervisory measures in place since 2019 supported an earlier intervention before liquidation became unavoidable.

The audit’s central conclusion is blunt: there were grounds to act earlier. Extrajudicial liquidation is a drastic step, but delay, according to people familiar with the review, magnified the damage. Losses to the Fundo Garantidor de Créditos alone are estimated at nearly R$ 50 billion, excluding pension funds and other investors not covered by the guarantee. From a regulatory standpoint, the cost of inaction now rivals—or exceeds—the cost of action, bringing supervisory judgment back to the forefront.

Investigators are revisiting the authorization that allowed control of Banco Máxima to be transferred to Master, the consolidation process that dragged on for roughly two years, and liquidity problems flagged in 2024. The internal review runs alongside probes by federal prosecutors that point to fragile liquidity and the sale of fictitious portfolios as late as 2024—signals that, in the view of technical staff, do not materialize overnight.

Public statements are also being weighed against contemporaneous data. In an Oct. 27 interview—before liquidation—Campos Neto said he had not dealt, during his tenure, with talks between Banco de Brasília and Master, a transaction later vetoed by the central bank. He added that Master posed an image risk, not a systemic risk. The audit is testing whether that assessment was defensible given the information then available.

The inquiry was ordered in November by current governor Gabriel Galípolo and is being conducted independently under strict confidentiality. After it began, senior officials in the Banking Supervision Department (Desup) were removed from their posts, without formal accusations so far—a standard step when regulators need to fully document decisions that culminate in a liquidation.