Brazil’s central bank considers the country’s banking system well provisioned and isn’t requiring lenders to set aside additional funds to cover bad loans, said a member of the government’s economic team with knowledge of the situation.
The increase of provisions by banks isn’t a concern for the central bank as it reflects a rise in loan delinquencies, said the person, who asked not to be identified because the discussions aren’t public.
O Estado de S. Paulo reported today that the central bank is demanding additional provisions from mid-sized banks, a measure that reduced lending and led to losses in the second quarter. The newspaper didn’t name banks or sources.
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