⚠️ Master concerns

A systemic risk bank is usually defined as a large institution whose collapse can trigger a chain reaction across the financial system, as Lehman Brothers did in 2008. But Brazil’s Banco Master, a mid-sized lender liquidated by the Central Bank in November, represents a different type of systemic risk: one whose shockwaves extend beyond markets and into the country’s political, judicial and regulatory core.

The bank’s fall was preceded by a series of fraud revelations, according to Central Bank documents, including the discovery of roughly BRL 12.2 billion (USD 2.2 billion) in fictitious loans that the institution had attempted to sell to the state-controlled Bank of Brasília (BRB). 

Master’s owner, Daniel Vorcaro, was arrested in November 2024 while preparing to leave the country for Malta, the Mediterranean island state which has no extradition treaty with Brazil. He was later released but must wear an ankle monitor.

The Banco Master saga is no longer about a single failed institution. It has become a test of Brazil’s institutional resilience…

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