Still the century of government savings banks? The Caixa Econômica Federal

Abstract

This article explores general concerns about government banking, social inclusion, and democracy through case study of the Brazilian federal government savings bank (Caixa Econômica Federal). Review of government savings banks in Brazilian history suggests that these institutions have been at the center of domestic political economy, expanding and contracting under a variety of political regimes and economic conditions. Since capitalization to meet central bank and Basel Accord guidelines in 2001, the Caixa has attempted to modernize, continue to serve as agent for government policies, and expand both popular credit and savings and investment banking activities.

Monetary channels of social inclusion: a case study of basic income and the Caixa Econômica Federal in Brazil

“…Founded in 1860, the Caixa retained, in September 2013, over US$ 384 billion in assets, 123,969 employees, 3,176 branch offices and a 17.0 Basel Accord Capital Adequacy Ratio (Central Bank of Brazil, 2014). Comparison of Caixa performance with private banks; analysis of balance sheets, branch office level data and point-of-sale traffic in branch offices and bank correspondents; and interviews with over 182 clients, staff and management of the Caixa and other banks confirm previous case studies (Mettenheim, 2006) and comparative (Ayadi et al, 2010) findings that many public savings banks have realized competitive advantages over private and foreign banks (even, and especially, after liberalization of national banking systems). This counters expectations that opening banking and credit markets would lead to the dominance of private and foreign banks and provides new concepts, theories, and policy alternatives that avert biases in microfinance toward private banks, non-governmental organizations and market funding.…”

“…In this sense, modernization of Caixa savings bank operations and concessions for government policy implementation proved complementary (Mettenheim, 2006). Family grants, other social services (unemployment insurance, social security, and payroll savings funds), and microfinance programs have been widely credited with reducing notorious levels of inequality in Brazil (Monzini, 2008;Neri, 2008).…”

Banking unconditionally: the political economy of Chinese finance in Latin America

“…The China Ex-Im Bank sought a larger share of labor, services, and goods procured in China, but Brazil was not willing to make concessions given its strict labor and local content laws (Alves 2013 housing, and urban development. Outside of being a scal for the government's social policies, it lends very little to the public sector, with about 94 percent of all loans destined to the private sector (Mettenheim 2006). The Chinese credit line, accounting for 8 percent of the Caixa's assets, will help Brazil nance much-needed infrastructure projects through private procurement.…”

Design rules for more resilient banking systems

“…In Brazil, state-owned and private banks have a long history together which has added to bankers' sense of social responsibility (Cardoso, 2004;McDonough, 1981). The Brazilian government runs two of the largest banks in Brazil, Banco do Brazil and Caixa Econômico Federal, as well as the powerful and efficient BNDES, the Brazilian National Development Bank (von Mettenheim, 2006;Willis, 1995). More than a development bank, BNDES has a significant presence in small and medium sized lending, and has successfully entered the micro-lending area as well (Stallings & Studart, 2006, chapter 8;von Mettenheim, 2006).…”

“…The Brazilian government runs two of the largest banks in Brazil, Banco do Brazil and Caixa Econômico Federal, as well as the powerful and efficient BNDES, the Brazilian National Development Bank (von Mettenheim, 2006;Willis, 1995). More than a development bank, BNDES has a significant presence in small and medium sized lending, and has successfully entered the micro-lending area as well (Stallings & Studart, 2006, chapter 8;von Mettenheim, 2006). However, in the last decade BNDES' mandate has been significantly expanded into larger infrastructural and industrial project-linked investments, providing nearly three-quarters of all long-term financing in Brazil by 2012 (Wise & del Tedesco Lins, 2014: 175).…”