🔎 Regulatory blindspots

Finance Minister Fernando Haddad expressed his desire in an interview this week to propose a major change to Brazil’s financial regulatory structure, shifting oversight of investment funds from the Securities Commission (CVM) — which is under his ministry’s purview — to the Central Bank.

Haddad said the idea is still under discussion within the Luiz Inácio Lula da Silva administration, while the Finance Ministry drafts legislation on the matter. Since 2024, Haddad has weighed up proposals to restructure the regulatory framework, among them the adoption of the “twin peaks” model used in countries such as Australia and the United Kingdom.

The debate has gained urgency as Brazil grapples with what Haddad recently described as the country’s largest-ever banking fraud case. Investigations by the Federal Police and market regulators have uncovered sprawling illegal schemes linked to Banco Master, the mid-sized lender liquidated by the Central Bank in November. The repercussions of this fraud extend beyond financial markets, and into…

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