“It is recognition of Brazil’s economic performance and of the Central bank’s work” said a press release from the Brazilian bank.
Brazil, along with China, will represent emerging markets on the board which is responsible for setting the guidelines of the BIS, the bank said.
The BIS, an international organization, seated in Basel, Switzerland, describes its mission as fostering international monetary and financial cooperation and serving as a bank for central banks.
Its board of directors also includes representatives from Germany, Belgium, Canada, the United States, France, the Netherlands, England, Italy, Japan, Switzerland and Sweden.
Brazil’s economic importance has increased in recent years as solid fundamentals earned it investment grade ratings from the three major credit rating agencies. It also weathered the global financial crisis with only a brief recession. Brazil is expected to grow by more than 5 percent this year.
Brazil is also one of the leading emerging markets within the Group of 20 nations, which has become an increasingly important forum for global policy discussion.
In related news bankers were told they should be aware of “the fragility of the economic recovery when taking on new risks”.
The head of the BIS Financial Stability Board (FSB) Mario Draghi said financial markets were in much better shape than could have been expected a year ago, “but much of the improvement was due to extraordinary monetary and fiscal measures”.
Draghi noted that banks were more inclined to take on risks again. “Bankers should be aware of the fragilities in the system,” he said. “They should have in mind that there are many fragile sides to this beginning of the recovery.”
Banks were able to raise capital, and their profitability, liquidity and funding conditions had improved significantly, Draghi said.
“At the same time, there is very substantial fragility in the system,” said Draghi, who is also governor of the Bank of Italy.
Draghi said that the refinancing needs of banks and companies were of a “really impressive amount” and governments also needed an extraordinary amount of money.
In addition, huge capital flows were driving up asset prices in emerging market economies, also adding to the fragility of the system, he said.