Valor International published a report on recent Federal Police operations involving the Brazilian financial and capital markets system, with contributions from Francisco da Costa e Silva and Mauricio Jayme e Silva.
See below for an excerpt from the article with our partners’ opinions:
Former CVM chairman Francisco Costa e Silva warned against using the current situation to undermine the regulator. “The CVM is there to help provide solutions,” he said. “The system does fail, but crises expose gaps and lead to improvements in supervision and regulation. There will always be people trying to exploit new loopholes — it’s an ongoing cat-and-mouse game.”
Maurício Jayme Silva, a partner at Bocater Advogados, said the case highlights more shortcomings in the Central Bank’s supervision of payment institutions than in CVM’s role. “The Central Bank not only sets prudential, financial, governance, and operational standards for payment institutions, it also authorises their operation,” he said. According to him, the greatest concern now is that fintechs will be unfairly vilified and subjected to excessive regulation. “Those working with payment institutions are fully in favour of regulation, but it should be proportional to the risks they pose to the financial system. That doesn’t mean rules can’t be improved, but demonising fintechs and payment institutions is not the answer,” he said.