Decision was signed by the president of the Central Bank, Gabriel Galípolo; This measure means the interruption of the institution’s operation, removing it from the National Financial System (SFN)
This Tuesday (18), the company decreed the extrajudicial liquidation of , less than a day after the Fictor Group indicated its interest in buying the institution. According to people who follow the issue closely, the settlement ends the possibility of the agreement moving forward. The settlement was signed by the president of the BC, . According to the term, Master SA Corretora de Câmbio is also under judicial liquidation. EFB Regimes Especiais de Empresas was appointed liquidator, with broad administration and liquidation powers.
Master’s judicial liquidation has been on the market’s radar since September, when the BC denied authorization for Banco de Brasília (BRB) to acquire the company. Master’s business model was considered problematic, as the bank issued securities guaranteed by the FGC and paid rates well above the market.
The announcement comes almost a month after the offer to purchase a stake in the institution by Banco de Brasília (BRB) was vetoed. The measure puts an end to an accelerated process of Master’s growth, which was based on two pillars: raising funds by paying investors interest rates well above the market average and the purchase of assets with low liquidity, such as companies with financial problems, court orders and credit rights.
What is liquidation?
Extrajudicial liquidation is a resolution regime available to the BC to deal with serious problems in financial institutions, in order to maintain the stability of the system. The measure interrupts the operation of the institution, removing it from the National Financial System (SFN). This means that the bank closes and stops working.
This regime is adopted when the situation of insolvency – that is, debt – is irrecoverable or when serious violations of the rules that regulate its activity are committed. The BC appoints a liquidator, who will seek the sale of existing assets to enable payment, if possible, to creditors.
The Credit Guarantee Fund (FGC) is also activated, a type of “insurance” for investors and account holders against defaults. The FGC guarantees payment of up to R$250,000 by CPF or CNPJ and by banking institution. There is no set deadline for the end of the liquidation: it ends by decision of the Central Bank or by the declaration of bankruptcy of the institution.
*With information from Estadão Conteúdo
Published by Nícolas Robert
