BNDES and capital markets: clarifications for the public debate in Brazil

Ricardo Barboza (), Ernani Torres (), Norberto Montani Martins (), Letícia Magalhães (), Thiago Pereira () and Victor Libera ()

Brazilian Journal of Political Economy, 2025, vol. 45, issue 2, 320-340

Abstract: Since 2017, Brazil’s capital markets have experienced significant expansion. Theprevalent view attributes this trend to the downsizing of the Brazilian Development Bank(BNDES). This paper proposes an alternative interpretation through a comprehensive analysisof data on BNDES and capital market operations. Our findings reveal substantial differences in borrower profiles, loan terms, standards on impact assessment of tax incentives, allocationof resources, and the procyclicality of operations. We conclude that the substitutionof the BNDES for the capital market is largely overestimated and that there are negative consequencesthat are commonly overlooked. JEL Classification: G18; G20; G21; O16.

Keywords: Capital market; BNDES; additionality; crowding-out; MSMEs (search for similar items in EconPapers)
Date: 2025
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