![]() ![]() ![]() ![]() Drawing on financial theory, Rezende says its existence conforms to “Minsky’s call” for designing a financial structure that dampens fragility and instability and provides funding to support the capital development of the economy. In its current form, Rezende argues that BNDES is the main source of long-term funding in Brazil, providing financing for capital development of inherently risky activities such as investment in expensive and long-lived assets such as stocks and bonds. Though the conventional belief assumes that capital markets are efficient and produce an optimal allocation of capital, this view is not supported by evidence.” “But much of the policy discussion has been misplaced. “BNDES has been subject to a range of criticisms such as crowding out private sector bank lending and it is said to be hampering the development of the local capital market,” Rezende explains. Although there’s widespread agreement that public banks have helped to steady the market, BNDES’ current role has been a source of controversy. During the global financial crisis, public banks allowed policymakers to counter financial instability by sharply expanding credit growth when private sector (domestic and foreign) banks reduced bank lending. 15, uses the theory of financial instability to argue that public banks, in particular the National Economic and Social Development Bank (BNDES), are helping to stabilize the Brazilian economy. Most recently, Rezende’s op-ed, “BNDES, financial fragility, and external fragility,” was published in Brazil’s largest economic finance and business newspaper, Valor Economico. Gaining national recognition among leading think-tanks and policy makers in Brazil, Assistant Professor of Economics Felipe Rezende received widespread media coverage this fall regarding his expansive research on the role of public banks in the aftermath of the 2007-2008 global financial crisis. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |