The rentier behavior of the Brazilian banks

Bruno Mader
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Bruno Mader: University of Geneva, Geneva, Switzerland

Brazilian Journal of Political Economy, 2023, vol. 43, issue 4, 893-913

Abstract: Brazil is an emblematic financialization case in which a high Selic interestrate benefited financial institutions. However, the real Selic rate has historically declined,becoming negative in 2020. As a result, one should expect banks’ incomes to be negativelyaffected, yet this was not the case. Banks overcame this macroeconomic challenge byincreasing credit operations. Within this context, our study confirms that the increasingcredit spread income is inversely correlated to the declining Selic rate. Hence, we concludethat banks have maintained a rentier behavior: security gains derived from the past highSelic rate phase were replaced by a high spread charged to credit consumers. JEL Classification: G00; E42; E43; E44; B50.

Keywords: Financialization; spread; banks; interest rate; markup (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ekm:repojs:v:43:y:2023:i:4:p:893-913:id:2435

DOI: 10.1590/0101-31572023-3457

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