 Repo market and primary dealers: derisking in the Brazilian Central Bank's liquidity managementCyro Faccin, Daphnae Helena Picoli and Bruno De Conti Chapter 5 in Central Banking, Monetary Policy, and Exchange Rates, 2026, pp 80-100 from Edward Elgar Publishing Abstract: This chapter examines the structure and operational tools of the Brazilian Central Bank's (BCB) liquidity management policy, focusing on the repo market and the primary dealer system. Drawing on the concepts of derisking and the international monetary and financial hierarchy, we characterize the evolution of the Brazilian repo market and the institutional framework of the primary dealer systems in the 2000s. We show that the BCB's repos play an important role for financial institutions’ assets – especially in the relationship between primary dealer banks and investment funds – as a derisking framework. Moreover, we argue that this framework reveals the existence of a Derisking State, in which state policy is primarily directed towards mitigating financial risks to guarantee the investability of assets. We argue that even if this phenomenon is considered recent in central countries, it has been a reality in peripheral countries such as Brazil since the liberalization policies of the 1990s. Keywords: Exchange Rates; Repo Markets; Primary Dealers; Derisking; Financialization; Monetary Policy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:23196_6 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Chapters from Edward Elgar Publishing |
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