A Brazilian Perspective on Basel III

Lucio Rodrigues Capelletto, Paula Cristina Seixas de Oliveira

This article was first published as a chapter in Basel III and Beyond, by Risk Books.

14.1 Introduction

As examined in Chapter 3, the Basel III reform has been discussed and endorsed (with the FSB and the G20 addressing the problems that resulted from the financial crisis) under a stronger institutional ground and a more expanded constituency than the Basel II Accord. This contributed to strengthening the decision-making process at the global level, with the aim of promoting greater homogeneity in the subsequent implementation of the new standards.

The publication of the new Basel Accord was a landmark for banking systems. Many countries have changed their prudential framework and implemented new procedures to guarantee the regular functioning of their financial systems. Among them, Brazil can be seen as an example of an emerging market that has strengthened its financial system in the midst of a transitional social environment, migrating from an unstable to a stabilised economy.

During the 2007 financial crisis, when economic fundamentals and financial systems were put under an enormous amount of stress, Brazil showed great resilience, as demonstrated by the fact that it