Brazil Financial Intermediation Costs and Credit Allocation
Earmarked credit was about half of total credit in Brazil at end-2015, after declining to one third of total credit in 2007, it is back to the levels in late 1990s. During 2008-15, earmarked credit increased from 12 to close to 30 percent of GDP. I...
| Main Authors: | , , , , , |
|---|---|
| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/526571490674228358/Brazil-Financial-intermediation-costs-and-credit-allocation-discussion-paper-for-workshop http://hdl.handle.net/10986/26401 |
| Summary: | Earmarked credit was about half of total
credit in Brazil at end-2015, after declining to one third
of total credit in 2007, it is back to the levels in late
1990s. During 2008-15, earmarked credit increased from 12 to
close to 30 percent of GDP. Initially, the objective was to
counteract the retrenchment in lending by private lenders.
However, earmarked credit expansion continued during the
subsequent commodity boom period. This paper provides a
taxonomy of the complex earmarked credit system and a
preliminary analysis of the potential implications. The
interventions include a complex web of price and quantity
regulations, reserve requirements, tax exemptions and forced
savings schemes that are used for earmarked lending to
specific sectors. The objective of the taxonomy is to
understand who funds the system, who benefits from it and
how is it intermediated. |
|---|