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The modernization of the financial system as a state policy must continue
The country has just concluded another electoral process. From now on, it will be important to make progress in building some bridges so that the country can preserve the north and the continuity of good credit policies.
One of the challenges facing the economy is the issue of public spending. For the time being, there is still little detail on the future of the main fiscal rule in force, the spending ceiling. From now on, it will be crucial to show how the public accounts will be kept in the black. The trajectory of inflation, interest rates, country risk and economic growth itself will depend on this definition.
In the microeconomic sphere, it is also important to preserve the continuity of the financial services reform agenda. Since 2016, the Central Bank has been promoting a series of measures to modernize the financial system. This agenda was named Agenda BC+ and was built on four pillars.
The financial citizenship pillar included the dissemination of financial education and the expansion of contact channels between society and the monetary authority. The pillar of reducing the cost of credit included updating the Positive dataIn addition to creating new rules for renegotiating revolving credit cards. This agenda also included updating legislation, proposing, among other measures, the independence of the Central Bank and increasing the efficiency of the financial system through a more favorable regulatory environment for competition and innovation.
The new Positive Registry went live, showing good results; the regulatory sandbox has created an environment in which financial innovation can be tested; the autonomy of the Central Bank has passed through Congress after a long debate; and financial education has entered society's agenda.
In Agenda BC+ we find the embryo of what would become Agenda BC#, launched in 2020. The BC# Agenda is based on the pillars of inclusion, competitiveness, transparency, education and another fundamental pillar that points to the future: sustainability. The sense of continuity between these agendas has allowed the national financial system to evolve, benefiting consumers and companies, which are increasingly dependent on financial intermediation.
Innovation is part of the pillar of competitiveness. It is this vector that has broken down barriers to entry and allowed new players to emerge in the credit and financial services market. Credit marketplaces, which make it possible to compare offers from different institutions, are a good example of how competition is advancing, allowing consumers to make better choices. Other new players that have recently emerged in this market, whose regulation was born out of this environment of stimulating competition, are Direct Credit Companies (SCD), authorized to make loans with their own capital, and People-to-People Lending Companies (SEP), which act as intermediaries between investors willing to lend funds and entrepreneurs, offering an alternative to traditional funding.
Innovations are appearing in the private sphere, but also in the public sphere. The most emblematic example in recent years has been the creation of PIX, an instant way of transferring money and making payments, which is free for consumers and can be used at any time of the day. The success of the implementation of PIX can be measured by the rapid adoption of this instrument by the population and the "export" of the model to other countries, such as Canada and Colombia, as the monetary authority recently reported. Also noteworthy are the creation of Open Banking, which allows information to be shared between financial institutions with the client's consent, and the Electronic Duplicate, created to make the supply of credit more efficient by anticipating receivables.
In the legislative sphere, it is worth highlighting the approval of the Over-indebtedness LawThe project, which facilitates the renegotiation of arrears for consumers, preserves a minimum for the maintenance of their lives. The bureaus played a leading role in the discussions on the bill, putting their expertise in the credit area to good use for society. Progress on the Guarantees Framework in the Chamber of Deputies. This framework creates a specialized collateral management service, allowing the same asset to be used to back several operations, in different institutions. The bill still needs to pass through the Senate.
In the last two decades, the credit-to-GDP ratio has jumped from 25% to around 55%. The improvement in the institutional environment was a key factor in this progress. The bureau sector believes that there is room for credit to advance even further, without compromising financial stability. Macroeconomic stability is important, but we must remember that what makes markets more efficient is the set of rules and incentives that govern their operation.
As we have seen, there is a lot of movement in the financial sector, including the credit segment, and the bureau sector advocates continuing the agenda of modernizing the financial system, in order to expand financial inclusion and education, prevent over-indebtedness, competition and the well-being that can be provided with the good use of credit.
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By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor
