Elements for reforming the Brazilian financial system

Abstract

The paper argues that the current configuration of Brazil's financial system, largely disconnected from the challenges of national development, is not a natural phenomenon but rather the outcome of successive rounds of reforms and political-institutional arrangements that have expanded private control over financial flows, to the detriment of directing them toward the country's productive and technological transformation. It proposes three main guidelines for reforming the financial system with the aim of establishing a public system for coordinating finance to guide investment and development: the reform of the monetary policy regime; the reconstruction of a public system for financing productive transformation; and the public coordination of capital markets. The article concludes that implementing this agenda requires deliberate political action to confront the structural power of finance and to align the financial system with the objectives of national development and improvement of the quality of life of the Brazilian people.