"Unlike other countries, even developed ones, there is no vision or concern here that there might be any type of systemic risk to our banking system," he said in an interview with Reuters on Thursday night. His remarks come amid criticism from President Luiz Inacio Lula da Silva about the central bank's benchmark interest rate, which has held at 13.75% since September, and its impact on the credit market, which he has said is on the verge of a crunch. The government has increased its attention on the credit market following the high-profile bankruptcy filing of retailer Americanas SA and the global banking crisis. Galipolo said monitoring of the credit market is a "permanent activity" in concert with the central bank and financial institutions. He said the government has noticed widening credit spreads, which was restricting new issuances and leading companies to seek bank loans, taking space from other borrowers. "So, the monitoring today is much more focused on whether there are specific sectors in the market that are suffering from specific droughts," he said. Without naming companies, the secretary gave the example of a power company facing payment problems. Brazilian power utility Light SA was granted an injunction on Wednesday to temporarily suspend payments of its financial debts.
In the minutes of its latest policy decision, the central bank said that while some members of its rate-setting committee see the credit slowdown as expected due to the monetary tightening, others saw a more intense movement than initially expected "but focused on some specific markets." (Reporting by Marcela Ayres and Bernardo Caram; Editing by Chizu Nomiyama)
