Managing a financial crisis: how legal constraints caused the institutional fragmentation of monetary power in Brazil during the post-2008 crisis
Autor(a) principal: | |
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Data de Publicação: | 2018 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | por |
Título da fonte: | Revista Direito GV |
Texto Completo: | https://periodicos.fgv.br/revdireitogv/article/view/77108 |
Resumo: | The lender of last resort (LOLR) is an economic agent that has the economic capacity and is willing to provide liquidity when no other agent would. Resolution authorities are legally empowered to apply technical tools to deal with solvency crises. Unlike developed countries, where central banks created a wide range of emergency liquidity facilities and occasionally played the role of resolution authorities, the Brazilian Central Bank (BCB) was legally prevented from increasing its political actions due to the Fiscal Responsibility Law. This article argues that, due to legal constraints, the management of the 2008 crisis caused the institutional fragmentation of the monetary power in Brazil: the official functions of the BCB and the Deposit Insurance Fund (Fundo Garantidor de Créditos – FGC) were restructured. We define monetary power as the economic capacity, combined or not with the legal competence, to influence directly the creation of credit money in the economy. An analytical model is proposed to identify both the extension of the institutional rearrangement and its inherent institutional limits. It is possible to identify significant problems of economic efficiency as well as legitimacy gaps in the current fragmented legal framework. The legal design, mainly created by ad hoc rules of the Executive branch, seems unable to effectively respond to deeper financial crises in the future. |
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Managing a financial crisis: how legal constraints caused the institutional fragmentation of monetary power in Brazil during the post-2008 crisisEnfrentando a crise financeira: como constrangimentos jurídicos causaram a fragmentação institucional do poder monetário brasileiro no pós-2008Brazilian Central BankBrazilian Deposit Insurance FundEmergency liquidity assistanceLender of last resortResolution regimeDeposit insuranceBanco Central do BrasilFundo Garantidor de CréditoPrestamista de última instânciaAutoridade monetáriaSeguro depósitoResolução bancáriaThe lender of last resort (LOLR) is an economic agent that has the economic capacity and is willing to provide liquidity when no other agent would. Resolution authorities are legally empowered to apply technical tools to deal with solvency crises. Unlike developed countries, where central banks created a wide range of emergency liquidity facilities and occasionally played the role of resolution authorities, the Brazilian Central Bank (BCB) was legally prevented from increasing its political actions due to the Fiscal Responsibility Law. This article argues that, due to legal constraints, the management of the 2008 crisis caused the institutional fragmentation of the monetary power in Brazil: the official functions of the BCB and the Deposit Insurance Fund (Fundo Garantidor de Créditos – FGC) were restructured. We define monetary power as the economic capacity, combined or not with the legal competence, to influence directly the creation of credit money in the economy. An analytical model is proposed to identify both the extension of the institutional rearrangement and its inherent institutional limits. It is possible to identify significant problems of economic efficiency as well as legitimacy gaps in the current fragmented legal framework. The legal design, mainly created by ad hoc rules of the Executive branch, seems unable to effectively respond to deeper financial crises in the future.O prestamista de última instância é o agente financeiro, que tem a capacidade econômica e está disposto a emprestar liquidez, no momento em que outros agentes se recusam a fazê-lo. Autoridades de resolução estão legalmente habilitadas a empregar ferramentas técnicas para conter crises de solvência. Diferentemente de países desenvolvidos, em que bancos centrais criaram diversas modalidades de operações de liquidez emergencial e, ocasionalmente, desempenharam o papel de autoridades de resolução bancária, o Banco Central do Brasil (BCB) foi legalmente impedido de aumentar suas ações devido à Lei de Responsabilidade Fiscal. Este artigo argumenta que, devido a constrangimentos legais, a gestão da crise causou a fragmentação institucional do poder monetário no Brasil: as funções do BCB e também do Fundo Garantidor de Créditos (FGC) precisaram ser reestruturadas. Define-se poder monetário como a capacidade econômica, combinada ou não com a competência legal, para influenciar a criação de moeda-crédito na economia. Um modelo analítico é proposto para identificar a extensão do rearranjo institucional no pós-2008 e seus limites inerentes. É possível identificar problemas significativos de eficiência econômica e de legitimidade. A estrutura legal, criada principalmente por regras ad hoc do Poder Executivo, parece ser ainda incapaz de responder efetivamente a crises financeiras mais profundas.Escola de Direito de São Paulo da Fundação Getulio Vargas2018-09-25info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionapplication/pdfhttps://periodicos.fgv.br/revdireitogv/article/view/77108Revista Direito GV; Vol. 14 No. 2 (2018): maio-ago (30); 450-491Revista Direito GV; Vol. 14 Núm. 2 (2018): maio-ago (30); 450-491Revista Direito GV; v. 14 n. 2 (2018): maio-ago (30); 450-4912317-6172reponame:Revista Direito GVinstname:Fundação Getulio Vargas (FGV)instacron:FGVporhttps://periodicos.fgv.br/revdireitogv/article/view/77108/73914Copyright (c) 2018 Revista Direito GVinfo:eu-repo/semantics/openAccessDuran, Camila VillardBorges, Caio2019-08-07T15:41:59Zoai:ojs.periodicos.fgv.br:article/77108Revistahttps://direitosp.fgv.br/publicacoes/revista/revista-direito-gvPRIhttps://old.scielo.br/oai/scielo-oai.php||revistadireitogv@fgv.br|| catarina.barbieri@fgv.br2317-61721808-2432opendoar:2019-08-07T15:41:59Revista Direito GV - Fundação Getulio Vargas (FGV)false |
dc.title.none.fl_str_mv |
Managing a financial crisis: how legal constraints caused the institutional fragmentation of monetary power in Brazil during the post-2008 crisis Enfrentando a crise financeira: como constrangimentos jurídicos causaram a fragmentação institucional do poder monetário brasileiro no pós-2008 |
title |
Managing a financial crisis: how legal constraints caused the institutional fragmentation of monetary power in Brazil during the post-2008 crisis |
spellingShingle |
Managing a financial crisis: how legal constraints caused the institutional fragmentation of monetary power in Brazil during the post-2008 crisis Duran, Camila Villard Brazilian Central Bank Brazilian Deposit Insurance Fund Emergency liquidity assistance Lender of last resort Resolution regime Deposit insurance Banco Central do Brasil Fundo Garantidor de Crédito Prestamista de última instância Autoridade monetária Seguro depósito Resolução bancária |
title_short |
Managing a financial crisis: how legal constraints caused the institutional fragmentation of monetary power in Brazil during the post-2008 crisis |
title_full |
Managing a financial crisis: how legal constraints caused the institutional fragmentation of monetary power in Brazil during the post-2008 crisis |
title_fullStr |
Managing a financial crisis: how legal constraints caused the institutional fragmentation of monetary power in Brazil during the post-2008 crisis |
title_full_unstemmed |
Managing a financial crisis: how legal constraints caused the institutional fragmentation of monetary power in Brazil during the post-2008 crisis |
title_sort |
Managing a financial crisis: how legal constraints caused the institutional fragmentation of monetary power in Brazil during the post-2008 crisis |
author |
Duran, Camila Villard |
author_facet |
Duran, Camila Villard Borges, Caio |
author_role |
author |
author2 |
Borges, Caio |
author2_role |
author |
dc.contributor.author.fl_str_mv |
Duran, Camila Villard Borges, Caio |
dc.subject.por.fl_str_mv |
Brazilian Central Bank Brazilian Deposit Insurance Fund Emergency liquidity assistance Lender of last resort Resolution regime Deposit insurance Banco Central do Brasil Fundo Garantidor de Crédito Prestamista de última instância Autoridade monetária Seguro depósito Resolução bancária |
topic |
Brazilian Central Bank Brazilian Deposit Insurance Fund Emergency liquidity assistance Lender of last resort Resolution regime Deposit insurance Banco Central do Brasil Fundo Garantidor de Crédito Prestamista de última instância Autoridade monetária Seguro depósito Resolução bancária |
description |
The lender of last resort (LOLR) is an economic agent that has the economic capacity and is willing to provide liquidity when no other agent would. Resolution authorities are legally empowered to apply technical tools to deal with solvency crises. Unlike developed countries, where central banks created a wide range of emergency liquidity facilities and occasionally played the role of resolution authorities, the Brazilian Central Bank (BCB) was legally prevented from increasing its political actions due to the Fiscal Responsibility Law. This article argues that, due to legal constraints, the management of the 2008 crisis caused the institutional fragmentation of the monetary power in Brazil: the official functions of the BCB and the Deposit Insurance Fund (Fundo Garantidor de Créditos – FGC) were restructured. We define monetary power as the economic capacity, combined or not with the legal competence, to influence directly the creation of credit money in the economy. An analytical model is proposed to identify both the extension of the institutional rearrangement and its inherent institutional limits. It is possible to identify significant problems of economic efficiency as well as legitimacy gaps in the current fragmented legal framework. The legal design, mainly created by ad hoc rules of the Executive branch, seems unable to effectively respond to deeper financial crises in the future. |
publishDate |
2018 |
dc.date.none.fl_str_mv |
2018-09-25 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
https://periodicos.fgv.br/revdireitogv/article/view/77108 |
url |
https://periodicos.fgv.br/revdireitogv/article/view/77108 |
dc.language.iso.fl_str_mv |
por |
language |
por |
dc.relation.none.fl_str_mv |
https://periodicos.fgv.br/revdireitogv/article/view/77108/73914 |
dc.rights.driver.fl_str_mv |
Copyright (c) 2018 Revista Direito GV info:eu-repo/semantics/openAccess |
rights_invalid_str_mv |
Copyright (c) 2018 Revista Direito GV |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Escola de Direito de São Paulo da Fundação Getulio Vargas |
publisher.none.fl_str_mv |
Escola de Direito de São Paulo da Fundação Getulio Vargas |
dc.source.none.fl_str_mv |
Revista Direito GV; Vol. 14 No. 2 (2018): maio-ago (30); 450-491 Revista Direito GV; Vol. 14 Núm. 2 (2018): maio-ago (30); 450-491 Revista Direito GV; v. 14 n. 2 (2018): maio-ago (30); 450-491 2317-6172 reponame:Revista Direito GV instname:Fundação Getulio Vargas (FGV) instacron:FGV |
instname_str |
Fundação Getulio Vargas (FGV) |
instacron_str |
FGV |
institution |
FGV |
reponame_str |
Revista Direito GV |
collection |
Revista Direito GV |
repository.name.fl_str_mv |
Revista Direito GV - Fundação Getulio Vargas (FGV) |
repository.mail.fl_str_mv |
||revistadireitogv@fgv.br|| catarina.barbieri@fgv.br |
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