- 51 -
governmental securities in the name of the National Treasury.
Essentially, the automatic transfer mechanism described above,
whereby the Central Bank provided funds to Banco do Brazil through
crediting its Banking Reserves Account, recognized and reflected
that, under the caixa unico system, the Brazilian Government
ultimately financed the governmental functions and operations Banco
do Brazil and the Central Bank carried out.20
On its books, Banco do Brazil made entries reflecting the
following: (1) Transfers of Central Bank tax payments to Banco do
Brazil's Banking Reserves Account at the Central Bank, (2)
collections of Federal Government tax receipts, and (3) deposits of
Federal Government revenues payable upon demand to the National
Treasury.
On the record presented in this case it is impossible to
determine what entries were made on the respective books of the
Central Bank and the National Treasury to reflect the Central
Bank's payment of withholding tax on the restructuring debt
20 The record is not entirely clear whether daily
surpluses or excess funds in the Banking Reserves Account were
turned back over to Banco do Brazil or whether the Central Bank
kept such surpluses in repayment of the funds it had advanced.
When the caixa unico system was ended in 1987, the Central Bank
was owed several billions of dollars by Banco do Brazil as a
result of its advancement of funds to Banco do Brazil over the
years. This liability of Banco do Brazil to the Central Bank,
however, was offset by an equivalent liability that the National
Treasury owed to Banco do Brazil. In ending the caixa unico
system, a novation was effected whereby Banco do Brazil's
liability to the Central Bank was canceled and the National
Treasury directly assumed the previous liability that Banco do
Brazil had owed to the Central Bank.
Page: Previous 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 NextLast modified: May 25, 2011