Bank Merger in Brazil Should Reduce Credit Shortage, Says Minister

    Finance Minister of Brazil Guido Mantega

    Finance Minister of Brazil Guido Mantega Guido Mantega, Brazil's minister of Finance, believes that the merger of Brazilian banks Itaú and Unibanco, is important because it will make the two institutions more solid. According to him, it is normal, at a moment of turbulence and problems in the international financial sector, for a move such as the one made by the two banks to happen.

    "These are two traditional, solid banks that contribute to economic activity, therefore I believe that it is important right now for them to join forces, in order to continue making more credit available," he said.

    Regarding the concentration in the sector, the minister stated that despite the reduced liquidity and some other problems, the banking sector in Brazil should remain roughly the same – with 10 to 15 relevant banks, and then the minor ones.

    "There are going to be a few changes, but not many, because the sector is already concentrated. The most important thing is that this concentration is aimed at strengthening the financial system," he said.

    The minister also stated that the merger might lead to a larger volume of credit available in the financial market. One of the complaints of the economic team concerns precisely the retention of funds by banks when faced with the crisis.

    "I believe that it is favorable, because it strengthens the institutions. Even though they are already strong, renowned and traditional, they are going to have greater financial power, in addition to becoming one of the largest institutions. The Itaú-Unibanco Holding is going to rank among the world's largest," said Mantega.

    With regard to the loss of leadership of the Bank of Brazil within the Brazilian banking system, the minister stated that the change in ranking may be temporary, and that the fact is not important. "That's life. There is nothing like one day after another. The Bank of Brazil will also have a chance to run for its money and re-establish itself," he said.

    To the minister, the fact that the state-owned bank has become second in the ranking is not too important, because at a moment in which funds are scarce, the Bank of Brazil has lived up to its role of providing greater liquidity (availability of cash), even more than it normally would. "It is not relevant whether it is the first, the second or the third. But I assure you that it [Bank of Brazil] will continue to grow."

    ABr

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    • Show Comments (22)

    • dnbaiacu

      Let’s stop being “politically correct” and tell it like it is!
      [quote]
      I just wanted to sound mysterious!. They are Bill Clinton, Hilary Clinton and Al Gore respectively. Launching another conspiracy theory.[/quote]

      You did a good job there Joao 🙂
      I am sick of the phrase “conspiracy theory” . 😥 It is misleading ,(as it was designed to be) . But it is the TRUTH.. And many in GOP deluded America had to face up to that the other day.. Now many KNOW somethinng is wrong for sure. 😉 😀 ;-). Wake UP! Can’t get beyond their own “superiority complexes” to see what is really going on. That’s just how stupid the Devil knows people are. Obamamania is the ace card that trumps them all 😉 🙁 😉 🙁
      It makes no difference who the ambassador to the U.N is. What will matter is how much of the coming propanganda you choose to believe.
      I am leaving before the only place there is to shop is WALMART. I don’t hate or love the U.S but blind nationalism gives me a headache. 🙁
      It was so funny , there were just as many people pissed off with the Obama election as were those who were giddy. The U.S has been polarized in the worse way because now there are even MORE undercover “haters”. Which will further the cause of eliminating any deemed “undesirable”. A climate of suspicion and paranoia is dawning.

    • dnbaiacu

      Joao
      Why the abbreviations? I have no idea who they are. 🙂 Help me out

    • dnbaiacu

      Joao your funny…
      BTW, who do you think is going to be the next U.S. Ambassador to the U.N.? Take a guess[/quote]

      Isn’t Caroline Kennedy being considered. Her and some other guy..?? I don’t know? But it would be strange that it would be a Kennedy if I have my history right. John F,. wanted to get the Fed out of the picture. And that’s why they took him out. But maybe they want to reconcile and somehow honor the family legacy? They do those things you know here. Kill off a threat and then clean it up with some kind of honor in the family.

      🙂
      [quote]
      Dont do that. [/quote]

      I am just absorbing everything right now.. That’s the silence on my part. 😉

    • dnbaiacu

      Joao…
      [quote][May be my association with Dnb is causing me to believe in “Conspiracy” theories./quote]

      😀 😀 😀 😀 😀
      PLEASE don’t get me started.. I am really trying NOT to be annoying lately. Too much “light’ can blind most.
      I am waiting on the “WORLD ECONOMIC SUMMIT” on the 15th. And I am also anxious to see how much more of a mess is created during this lame duck session on capitol hill.
      Consumer spending is screeching to a halt here. Just before the beloved “holiday” season. Looks like Xmas will be lost for many before it’s “taken away” by the” New World Order”.
      But I’ll digress. 😉

    • dnbaiacu

      One thing is for sure….
      [quote]YOU THE PEOPLE ARE TAKEN FOR THE RIDE !!!!!

      laugh….laugh….laugh…laugh…laugh !
      [/quote]

      I will do everything I need to do financially BEFORE MOVING BACK TO BRAZIL!

    • Falupa

      Brazil Bank Merger
      I can tell you what is going to happen. One big bank is going to be formed knocking all other banks out of business, especially the smaller ones. That is the problem with most of these mergers. It is just a question of whether or not this larger bank will survive. I agree that there are holes in this story. It’s always harder to split up a company than make a large one.

    • dnbaiacu

      Joao
      [quote], DnbÀ‚´s forecast about the U.S. Presidential elections was 100% prophetic.Mine on BB also might come true.No quotes from the “Book” nor “Al -Koran”. It is enough to read the past history a bit and accompany the present to forecast the future. [/quote]
      :-)Hello
      Truth be told , you really don’t need the “Book” to understand a lot of this. Just enough common sense to get beyond the surface and the smoke as Ch.c suggests
      [quote]
      – most people dont realize yet how things are hidden and kept secret or are interpreted the wrong way[/quote]
      [quote]
      My overall opinion, as much for the EU, USA, China, Brazil or whoever is….DONT TRUST WHAT THE PRESIDENTS OR MINSITERS SAY [/quote]

      Yes, they are paid to lie and fluff. 😥
      The “Word” only helps one make SENSE of the madness. If you don’t start from the premise that we are fed lies , you are doomed from the start.
      What’s funny ,,, and sad . is that most will agree that there are lies told, but even more want to question if there is TRUTH. ???????
      If the worlds “leaders” consistently tell lies , what the heck are they trying to hide and with what agenda????

      Most are too afraid to want to know… 😉 🙂
      HINT..
      We all know Lula , Obama and the likes are puppets. …. But for WHO???? and just WHO do these people work for????
      I expect no response… I know .. I am just a babbling fanatic.. 🙂 😀 😉 😉

    • dnbaiacu

      Same stuff different country
      [quote]Cheerleading and happy spin is not going to change the facts. [/quote]

      There is a lot of holes in this story.
      I am waiting for clarification from Ch.c 🙂 Some real details

    • João da Silva

      dnbaiacu
      [i]I have no idea who they are. Help me out [/i]

      I just wanted to sound mysterious!. They are Bill Clinton, Hilary Clinton and Al Gore respectively. Launching another conspiracy theory. 😀 😉

    • João da Silva

      Ch.C
      Here is something interesting for you to read on a Friday afternoon:

      [url]http://www.estadao.com.br/economia/not_eco274027,0.htm[/url]

    • João da Silva

      dnbaiacu
      [quote]Isn’t Caroline Kennedy being considered. Her and some other guy..?? I don’t know? [/quote]

      I think it is going to be one of the following persons:

      a)WJC b)HRC c)AG d) None of the three nor Caroline.

      Remember what you said about U.N in several posts of yours.

    • João da Silva

      Ric
      [quote] Like Collar, these sudden rises to candidature don’t happen in a vacuum.
      [/quote]

      You are 100% right.That is the reason I think in 2010 we are going to have a “surprise” and “unknown” candidate, already being nurtured.

    • ch.c.

      I am waiting on the “WORLD ECONOMIC SUMMIT” on the 15th.
      There will be grand statements and apparent agreements !!!!

      But FUNDAMENTALS disagreements will prevail !

      Who can even expect that both the USA or the EU have to continue to accept their massive trade deficits with the emerging nations ? Even more when taking in account their unemployment rate, which are basically similar to Brazil, using Brazil stats !

      Where is the common sense if one is objective and not subjective ?

      Should the U.S. and EU accept that emerging nations SUBSIDIZES ALL THEIR INDUSTRIES EVEN DURING NORMAL TIMES SUCH AS THE LAST FIVE YEARS……AND THEN BE CRITICIZED HARSHLY ON THEIR AGRICULTURAL SUBSIDIZES ONLY…… BY EMERGING NATIONS ?

      70 % of the World population had fuel subsidizes. From both oil importing countries and oil exporters !
      ZERO developed country subsidizes fuel to 100 % of their population.

      Where is the common sense of the emerging nations ?

      At the latest WTO negotiations it was India, China and Argentina who said they have to defend THEIR farmers !
      Are the EU and USA not entitled to defend THEIR farmers, the same way you are entitled to defend YOURS ?

      Are food prices better when they are EXPENSIVE OR CHEAP ? If your answer is EXPENSIVE IS BETTER, then feel free to increase your local prices as High as You Want ! But then let us to sell them as HIGH OR LOW AS WE CHOSE !
      No one has ever forced Brazil to NOT have the World Highest Prices for the Iphone or Ipod or forced to have other countries to have prices much lower than in Brazil.
      Especially knowing Ipods and Iphone are both made…….. in China !!!!!

      In my view what you dont take in account is the FREEDOM of others. You feel free to do what YOU WANT but dont expect others to have the same RIGHTS !!!!

      If there will be a surprise, in my opinion, it will be one that will hurt YOU (EMERGING NATIONS) in your filthy games and tricks ! YOU ARE NOT GONNA TO WIN WITH YOUR CONTINUED CHEATINGS AND CLOSED BORDERS !
      As I said many times, your only acceptable defense, to continue your economic growth, will be to DEPRECIATE YOUR CURRENCIES !!!! Ut already started in 2 ways :
      Declining commodities prices and declining emerging nations currencies…and far more is to come !!!!
      Your GDP will collapse….. when expressed in US$ !!!
      GUARANTEED
      Your GDP will go down to a lesser extend….. when expressed in EUROS !
      GUARANTEED
      Your GDP will collapse…when expressed in JAPANESE YEN !
      GUARANTEED

      But your GDP will continue to grow…..at a smaller pace ! Brcause your country output will grow…but not when expressed in US$, EUROS OR JAPANESE YEN !!!!!!

      MORE SIMP’LE THERE IS NOT !
      SWISS GUARANTEE !
      😀 😉 😀 😉 😀 😉 😀 😉 😀 😉 😀 😉 😀 😉 😀 😉 😀 😉

    • Ric

      Mortgage Interest
      I think it’s eleven or twelve percent per year. Thru the Caixa Economica.

      Last night I was talking to a friend from the east coast who is here now, he thinks John Kennedy II was taken out by someone who considered him a political threat, in that PA32R crash in the Atlantic.

      Conspiratorially, is it too much to suggest that the financial meltdown was planned to get Obama back to number one in the polls? We know about Soros and Zbigniew, but there may be more Masters of the Anointed One. Old Wall Street hand couldn’t believe the crazy way the markets were up 5%, down 5%, in one trading session, day after day. Maybe the manipulators were short in the right stocks, making money while bringing their boy back, ruining millions in the process. Like Collar, these sudden rises to candidature don’t happen in a vacuum.

      There have been a number of other suspicious deaths of politically connected people in personal aircraft, which are hard to otherwise explain, unless one is a non-aircraft owner who thinks that all planes are just crashes waiting to materialize.

    • João da Silva

      [quote]PLEASE don’t get me started..[/quote]

      The idea is to get you started. Lately you have been very quiet and I am not liking this recent negative attitude of yours! Unless you have been offered the post of an Ambassador by Obama. 😀

      [quote]I am waiting on the “WORLD ECONOMIC SUMMIT” on the 15th.[/quote]

      So am I. 🙂

      [quote]But I’ll digress. [/quote]

      Dont do that. 🙁

      BTW, who do you think is going to be the next U.S. Ambassador to the U.N.? Take a guess.

    • ch.c.

      To all !
      – “Yes, they are paid to lie and fluff.”
      Yessss and Noooo. A) They want to stay in power and get the best possible image B) They dont want to create fears and disorderly markets. Therefore things must be “smoothed”. They are alway BULLISH during ALL WHOLE bear markets. But We the People get the Hole…in our purses ! At the end what they have and play with is…..OUR MONEY THEY GOT THROUGH OUR TAXES !!!!!

      – “One big bank is going to be formed knocking all other banks out of business”
      WRONG ! The pure wealths management banks dont have these individuals or commerfcial write offs or write downs losses.
      They suffer somewhat because their assets are also goi8ng down, but they have no risk of bankruptcy ! The Wealths Management
      depts in multi lines banks (investments banks or commercial banks) have always been the CASH COWS to the other departments/divisions.

      – As I stated in a thread yesterday, people look mostly at developed nations banks and their huge losses. But….but…Chinese Banks
      got a far more bigger bailout amount…years before the actual crisis started !
      The Chinese Government has provided US$ 650 billion to their banks due to their NON PERFORMING LOANS even during the booming times ! There….EVERYTHING IS GOVERNMENT SUBSIDIZED. EVERYTHING !

      – You may think it is not so in Brazil ! Right ? MY EYE !
      TODAY the Brazilian Government announced a US$ 1,9 billion RESCUE (FUNNY BUT TRUE) package to…FOREIGN AUTO MAKERS !
      Why ? Because the automakers in Brazil had their FIRST down month production in 2 years.
      Yesssssss… “Production was little changed at 296,300, while exports declined 16 percent to 66,000.”
      ” Finance Minister Guido Mantega said today government- controlled Banco do Brasil SA will provide 4 billion reais ($1.9 billion) of loans to carmakers’ financial arms to help sustain sales this month and in December.”

      Yesssssss….Brazil criticize the developed nations for their agriculture subsidizesm but not their own Agricultural & ALL industries subsidizes !
      When vehicles productions dont even declined…..automakers already get Brazilian Governhment subsidizes.

      Just imagine what Robin the Crook would have said if GM and Ford would have gotten the U.S. government help….several years
      ago !!!!

      Conclusion : Brazil is not any different than China !

      but…but…but…far FAR FAR FAR more is to come on…NON PERFORMING LOANS from consumers, sub prime real estate, small and mid size companies….IN BRAZIL ! Your lending rates are simply UNSUSTAINABLE !!!!!
      Your Mato Grosso farmers already stopped paying interests on their loans. Who is going to absorb these losses ?

      Stupid question already asked : what is the approximate mortgage rate and the minimum down payment in Brazil ??????

    • João da Silva

      Falupa
      [quote]I can tell you what is going to happen. One big bank is going to be formed knocking all other banks out of business, especially the smaller ones. [/quote]

      I agree with you about one big bank that is going to be formed. But, why is Mantega talking about Banco do Brasil that is supposed to get a “chance to run after its own money”? For GodÀ‚´s sake, it is a government bank and the top management is filled with its cronies. Something does not sound right.

      Another thing that came to my mind when I read your comment was that the buying of Brasil Telecom by Oi. It is supposed to form a truly “National” Telecom conglomorate to compete with the Spanish owned “Telefonica”!!. Does not make sense either.

      May be my association with Dnb is causing me to believe in “Conspiracy” theories. 😀 😉

    • ch.c.

      Furthermore……
      for whatever m view is worth, I slightly disagree with the above comments mentionned.

      Because I noted very often in the past that when COMMODTIES in general were LOW in prices, this reduced the inflation rate in developed nations, But….but…but….INCREASED inflation in commodities producing countries !!!!
      Reason being lower companies revenues, lower profitability or even losses, but…but…..still higher spending from the various Governments which always end up in currencies depreciations, sometimes real collapses as Brazil SHOULD know in view of their currency history !!!!
      I dont pretend you are going to take off another 3 zeroes once more from your currency, but there is Nooooo reason that your currency doesnt depreciates by another 30 to 50 %…….more or less in line with other emerging nations currencies.
      And this regardless of whatever size of your foreign currencies reserves.
      Many countries with far more foreign currencies than Brazil on both relative and absolute numbers, have already seen their currencies go down….such as South Korea !!!!!
      Foreign curencies reserves help to a small extend but is certainly not the panacea for a strong currency !
      Believing otherwise and you get it all wrong !
      the USA have very low foreign currencies but their currency is at a multi years high agaist many emerging nations FULL of foreign cureencies. Examples Russia, South Korea and…BRAZIL !!!!!

      AND TO MY UNDERSTANDING OF COMMON SENSE….a Government that HAS to borrow money in its own currency at the World Highest Interests Rates….IS NOT A WELL MANAGED COUNTRY.
      If one disagree with that common sense then why lower yielding currencies remain stronger and streonger over time than the higher yielding currencies ?????
      To my knowledge, No foreign companies outside Brazil BORROW in Brazilian Reais ! Because they are not idiot enough to borrow at 40 % when they can borrow at much lower rates in another currency !!!!!
      Even Brazilian companies prefer to borrow foreign currencies and NOT Brazilians Reais…if not heavily goverment subsidized !!!!!

      The lenders have always the knive and the hammer ! Same is true for YOU the People in Brazil ! YOUR BANKS are charging You
      35 % on cars, 60 % for consumers goods…..BUT YOU ARE CRITICIZING FOREIGN BANKS !!!!!!!!

      Lets make a deal : foreign banks are quite willing to lend you at 5 % BELOW what your banks charge YOU THE CONSUMERS, SMALL AND MID SIZE COMPANIES…BUT USING OUR CURRENCIES !!!!! And provided you pass the Brazilian lending policies !!!!!!

      100 % of Brazilians banks would go bankrupt ! SIMPLE !

      Until this happens you have to swallow the facts that your filthy governments are not for more banking competition, meaning YOU THE PEOPLE ARE TAKEN FOR THE RIDE !!!!!

      laugh….laugh….laugh…laugh…laugh !

    • ch.c.

      They happen when one is going under and an attempt is made to save it.
      Yesssss…usually during problems time but not all the time.
      ABN Amro was taken over at the top of the top…of the cycle ! By Fortis and Royal Bank of Scotland…now both in deeeeepppp sh..t
      Golden West Financial was taken over by Wachovia ($ 40 B.) at the top of the top. Now Wachovia is being bought out….to save bankruptcy.

      About Brazil :
      – most people dont realize yet how things are hidden and kept secret or are interpreted the wrong way.
      Please refer to what I show yesterday from valuable sources :
      “The so-called À¢€˜shadow banking systemÀ¢€™ is smaller than the one in the US and does not carry MBS, RMBS type of synthetics. This does not mean that the portfolio of commercial banks and corporations doesnÀ¢€™t carry the so-called À¢€˜toxic assetsÀ¢€™. The fact is that these toxic assets are everywhere and in Brazil they are called À¢€˜structured notesÀ¢€™. The securitization process and the overall structure of these notes are extremely similar to the collateralized debt obligations, the so-called CDOs.”

      Ohhhhh what I did not copied and paste yesterday was what followed the above comments :
      “In our view, the current measures taken by the Brazilian Central Bank might not be enough to prevent a systemic collapse of the commercial banks and corporations. Different from the recent past, when crisis were created due to inflation, exchange rate or public debt, the current situation is one where the crisis is exogenous from the system. Not only immediate action is needed but also the Central Bank should set aside its inflation target goal and its concern with growth to face the immediate challenge of deflation and the fact that Brazil should be negatively affected by ongoing global financial crisis. It is important to realize this sooner rather than later.”

      Think now for 2 minutes ! Re-read the comments a second time very slowly and try to have your own view….either in accordance or disagreement !

      My overall opinion, as much for the EU, USA, China, Brazil or whoever is….DONT TRUST WHAT THE PRESIDENTS OR MINSITERS SAY !
      Had Bush and the various ministers not said at least 20 times during the past 5 years…they were for a STRONG US$ ?????
      Had Trichet not taken Bush by his own promises for a strong US$ ?
      Had Lula not lied openly more than once, such as Brazil is Immune. Everything is due to the problems of developed nations, not due to Brazil. And this despite Brazil Government Interests Rates are the World Highest…after inflation, similar to Turkey ?????

      If you Brazilians want to understand in a more objective way and with non nationalism view about Brazil, then read as much as you can about TURKEY !
      You are Nooooo different ! Turkey is your mirror in many ways !
      I always challenge anyone to prove me wrong with facts and stats

      😉 😀 😉

    • João da Silva

      [quote]I am waiting for clarification from Ch.c[/quote]

      [quote]I agree… something is not quite right… (as Shakespeare would have said “… in the Kingdom of Denmark)
      in this particular case …in the bureaucracy and secrecy of Brasilia! [/quote]

      I you had read some previous comments made by Ch.c and me [i]carefully[/i], you would have known that UNIBANCO was about to go belly up (Probably Ric also knew). The story does not end here. There are some other smaller banks in trouble. Do not be surprised that in a few months, we will hear some unpleasant news about BB too. Pay attention to MantegaÀ‚´s comment as quoted below:

      [quote]With regard to the loss of leadership of the Bank of Brazil within the Brazilian banking system, the minister stated that the change in ranking may be temporary, and that the fact is not important. “That’s life. There is nothing like one day after another. The Bank of Brazil will also have a chance to run for its money and re-establish itself,” he said. [/quote]

      “ThatÀ‚´s life” as Mantega aptly said. 😀 😉

      BTW, DnbÀ‚´s forecast about the U.S. Presidential elections was 100% prophetic.Mine on BB also might come true.No quotes from the “Book” nor “Al -Koran”. It is enough to read the past history a bit and accompany the present to forecast the future. 😉

    • Augustus

      Something fishy….
      I will let you off the hook – for now À¢€“ as valiant gestures are currently in vogue – in sync with the monumental changes at hand…

      I agree… something is not quite right… (as Shakespeare would have said “… in the Kingdom of Denmark)
      in this particular case …in the bureaucracy and secrecy of Brasilia!

    • Ric

      Underlying Principle
      We all understand, don’t we, that mergers rarely happen when both entiries are viable and healthy? They happen when one is going under and an attempt is made to save it.

      Cheerleading and happy spin is not going to change the facts.

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