The Financial Stability Board (FSB) has published its Peer Review of Brazil, highlighting significant advancements made by Brazilian authorities in regulating and supervising investment funds. This review builds on the initial findings from Brazil's first FSB peer review conducted in 2017. It focuses on how authorities are monitoring vulnerabilities within investment funds, the regulatory measures implemented to manage these vulnerabilities, and the institutional arrangements for overseeing investment funds in Brazil.
The review acknowledges that Brazilian authorities have modernized and strengthened regulations, introducing measures to limit leverage and enhance liquidity management tools. However, it also suggests that further improvements can be made to enhance the monitoring of financial stability risks and market developments affecting leverage and liquidity mismatch.
Ryozo Himino, Chair of the FSB’s Standing Committee on Standards Implementation, stated: “The introduction of the new regulation for the investment funds sector is timely given the growth and importance of the sector to Brazil. The Brazilian authorities have made significant progress since the last FSB peer review to strengthen the regulation concerning leverage and liquidity risks. This report provides a reference point to other jurisdictions with similar challenges.”
FSB member jurisdictions regularly undergo peer reviews to assess their adherence to international financial standards. As part of this commitment, Brazil volunteered for a peer review in 2023-2024. The report was prepared by experts from FSB member institutions under the chairmanship of María José Gómez Yubero from Spain’s Comisión Nacional del Mercado de Valores.
The analysis draws on responses from Brazilian financial authorities as of July 2024 and includes dialogue with these authorities alongside discussions within the FSB’s Standing Committee on Standards Implementation.
All completed peer review reports are available on the FSB website. The FSB plays a crucial role in coordinating international financial stability efforts among national financial authorities, international standard-setting bodies, and various committees.