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The Invisible Housing Crisis in Brazil

February 28, 2020 - 12:30pm to 1:20pm
Bolivar House, 582 Alvarado Row, Stanford, CA


Lecture Title: The Invisible Housing Crisis in Brazil: How Did the Local Central Bank Produce Unreliable Official Data & How Have Banks Benefited from That?

Prof. Maria Bertran argues that both the good image of the Brazilian banks and the lack of visible problems connected to the local mortgages are part of one same issue. She argues that the few banks that control the highly-concentrated financial market in Brazil developed a peculiar symbiosis with the Central Bank of Brazil. The Central Bank of Brazil is entitled with the necessary laws to access the market information. The institution also has the needed technology and funds to develop an excellence work. However, the discretionary power in choosing which data to select and which data to dismiss creates an institutional unbalance between the reality in the streets and the official data reality. 

Some of the most elementary questions that should be asked by any Central Bank were never asked by the Brazilian Central Bank. While this phenomenon is not widespread in all the areas of bank regulation, it is definitely a blind eye for data involving household debt, and especially real estate market. The failed public diagnosis of a housing burst in Brazil creates several deleterious consequences. The most important of them is to avoid the elaboration of better public policies. The need to rethinking subsided-loans is an untold problem. The need to rethinking important details on the recovery of collaterals is also an untold problem. The need for better credit scores for mortgage approvals also keeps a silenced debate. Another severe consequence of the failed public diagnosis is the creation of a fictitious scenario for international investors. Lately, Prof. Bertran has been developing studies that link the decline of social wealth with corruption in the banking sector.

Maria Paula Bertran is the Law and Society Associate Professor at the University of São Paulo – Brazil (Ribeirão Preto Law School). Her research focuses mainly on banking regulation and its outcomes for consumer's rights, the increase of inequality, and sustainable economic growth. She is a former Brazilian Fulbright Distinguished Chair in Democracy and Human Development at the Kellogg Institute in 2018. Lately, she has been developing studies that link the decline of social wealth with corruption in the banking sector.


Event Sponsor: 
Center for Latin American Studies
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