Towards a More Effective BNDES
Founded in 1952, the National Bank for Economic and Social Development (BNDES) is a financial entity fully owned by the Brazilian government. It is in the process of redefining its priorities and its role going forward. New operational policies (OP...
| Main Authors: | , , , , |
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/306511499659990217/Towards-a-more-effective-BNDES http://hdl.handle.net/10986/28398 |
| Summary: | Founded in 1952, the National Bank for
Economic and Social Development (BNDES) is a financial
entity fully owned by the Brazilian government. It is in the
process of redefining its priorities and its role going
forward. New operational policies (OPs) published on January
5, 2017, mark an important milestone. This report aims to
contribute to the improvement of BNDES OPs and, more
generally, provide a medium- to long-term view of BNDES’
role in the Brazilian economy. It provides a conceptual
framework to establish BNDES as a development bank that aims
to offset market failures that impose a wedge between
private and social rates of return and limit access to term
finance. The framework differentiates credit-constraining
factors from the presence of externalities. The former might
justify facilitating access to long-term financing; only the
latter might justify subsidies. The paper then applies the
framework and methodology to BNDES’ operations and finds
that BNDES has in the past provided financing to many firms
that have access to alternative sources and subsidies beyond
what could be reasonable in economic terms. The paper
provides recommendations to establish BNDES as a more
effective and focused development bank, less dependent on
the government for funding, and less subject to interference
by improving its governance. |
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