- 16 - Bank would frequently credit and advance substantial funds to Banco do Brazil’s Banking Reserves Account, because of the governmental functions and operations Banco do Brazil carried out. Until 1965, when the Central Bank was formed, Banco do Brazil served as the country’s sole monetary authority. During the times relevant to this case, Banco do Brazil was owned 51 percent by the Brazilian Government and 49 percent by private shareholders. From 1965 through 1986, Banco do Brazil had four primary functions: (1) Commercial banking, (2) monetary authority, (3) management, control, and distribution of currency, and (4) responsibility for bank clearing. Like the Central Bank, Banco do Brazil functioned as: (1) A lender of last resort to public-sector entities, (2) a development bank responsible for various subsidized credit programs of the Brazilian Government, and (3) a fiscal authority that managed the Brazilian Government’s budget. Banco do Brazil and the Central Bank together performed a number of governmental functions, including their unified management and operation of Brazil’s monetary and financial system under what was known as the caixa unico system.10 To perform its various governmental functions, Banco do Brazil needed access to funds. Funding was provided by the Central Bank. When Banco do Brazil, in carrying out its governmental functions, 10 The Brazilian term “caixa unico” means a unified system of cash or financial management.Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011