Rogério Sobreira

An assessment of the global impact of the financial crisis

Introduction Current Crisis in the US and Economic Policy Implications The Global Economic and Financial Crisis: Which way Forward? Crises and the Bretton Woods Institutions and the Crises of the Bretton Woods Institutions Crisis in the Euro-Zone The Impact of the Current Crisis on Emerging Market and Developing Countries Crisis in Western and Eastern EU: Does Policy Reaction Address its Origins? The Impact of the Sub-Prime Financial Crisis on the Transition and Central Asian Economies: Causes and Consequences World Financial Crisis and Implications on China The 2008 Financial Crisis and Banking Regulation in Brazil Exchange-Rate Derivatives, Financial Fragility and Monetary Policy in Brazil during the World Financial Crisis

Os Acordos de Basiléia e bancos de desenvolvimento no Brasil: uma avaliação do BNDES e do BNB

In Brazil, development banks were subject to the regulatory requirements of Basel Accords and treated similarly to other institutions belonging to the Brazilian financial system. However, given the idiosyncratic nature of development banks it is often argued that the implementation of agreements of this type to these institutions is not adequate, as long as it could prevent them from fulfilling their mission effectively. Therefore, this article aims to assess whether the submission of two major Brazilian development banks, BNDES and BNB, to the Basel regulatory framework caused a loss of dynamism of these institutions in order to prevent full or partial compliance with its functions. We conclude that the two institutions mentioned were affected asymmetrically by the regulatory requirements associated with Basel Accords, allowing the BNDES to exercise its functions with some little limitation, but heavily damaging the BNB in the exercise of its functions as a development bank.

Investimento público em educação fundamental e a qualidade do ensino: uma avaliação regional dos resultados do Fundef

Since 1998, the public investment in the Brazilian fundamental education has been organized by the FUNDEF (Fund for Maintenance and Development of Fundamental Education and Valorization of Teaching). One of the goals of this fund is to assure resources for the public investment in fundamental education, providing its quality, and improving the students’ proficiency. This paper analyzes the effects of the FUNDEF in the students’ performance utilizing public data from the fund and from SAEB (Basic Education Statistics Synopsis). The results suggest that the financial support and the teachers’ qualification are important variables to explain the progress in the public education.

The 2008 Financial Crisis and Banking Regulation in Brazil

The Brazilian economy was severely affected by the 2008 crisis. At the beginning of the crisis, the overwhelming majority of economic agents and authorities thought that Brazil could face some sort of decoupling since many of its macroeconomic fundamentals were very good. What we saw, however, was that the Brazilian economy was not decoupled, and expectations faced a huge deterioration soon after the bankruptcy of Lehman Brothers on 15 September. Two aspects regarding the impact of the crisis in Brazil, however, deserve considerable attention: (i) although deep, the impact did not last long. Actually, the GDP growth experienced a good recovery in the second quarter of 2009, showing the reaction of the Brazilian economy (ii) the Brazilian banking system performed very well during the crisis, although we cannot say the system was not in danger at the worst time of the crisis. In this aspect, it is interesting to mention the fact that the system showed a great deal of resilience. In our opinion, the restructuring faced by the banking system in the aftermath of the Real Plan, the development of a solid banking supervision regulation and the government’s management of public debt as part of the macroeconomic policy used to face the external crises was very helpful in allowing the system to avoid the systemic crisis that was a clear possibility to the Brazilian banking system in the beginning of 2009.

Development banks, risk and Basle II: some assessments

The implementation of the Basle II agreement in the financial markets of world economies has been seen as a significant advance in relation to the model enforced under the first agreement (Basle I). It is generally understood that the new agreement represents a substantial advance in relation to the first because it allows banks to better deal with the risks to which they are exposed. Nevertheless, when the application of these principles to development banks is considered it can be noted that certain inconsistencies exist, notably the fact that these institutions are typically public institutions – or at least strongly dependent on public funding – and they do not operate the payment system of the economy. Therefore, the application of the Basle rules to these institutions does not make sense. This means that Basle does not represent an appropriate set of recommendations for how these institutions should deal with their risks, whether because the proposed form of dealing with risks is inadequate, or because other relevant risks for these institutions are not covered by Basle I and II.

Estrutura de capital e estratégias competitivas

This paper presents a survey of studies that emphasize the effects related to financing decisions on the firms’ competitive ability. It describes the results of theoretical patterns and an empirical research published during the last two decades and also emphasizes the agenda determined by traditional studies on this subject. Such studies stresses specially the aspects related to the limited liability of the firms’ owners, the aspects related to the utilization of the capital structure to stimulate predatory competition and also the incentives to establish agreements keeping limits to the competition, considering the choices related to the capital structure of the firm. Considering that the stylized facts suggest a connection between capital structure and competitive strategies, it becomes an important aspect for finance and industrial organization studies. Besides, the results of theses studies have empirical implications that can give form to public policies regulating competition and stimulating the use of debt as a main financing source.