The Brazilian banking system has changed levels in recent decades. In the 1990s, the country went through an intense process of consolidation, with a few institutions concentrating most of the operations. Today, the scenario is different.
According to the Central Bank, Brazil has more than 150 authorized financial institutions, with around 80 banks in operation.
This growth is positive. Expands access, improves services and increases system efficiency. It is a relevant advance in diversity, competition and innovation.
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At the same time, there is an inevitable consequence: more complexity and more responsibility in risk management, especially liquidity.
What has changed in practice
The expansion in the number of institutions was accompanied by new business models, greater digitalization and faster transactions.
Recent events in the sector have reinforced an essential point: liquidity is not just a regulatory requirement. It is a central element of sustaining trust.
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The question facing executives and boards is not whether the bank meets the minimum ratios.
It’s whether you’re prepared for real stress scenarios.
Fulfilling the indicator is not enough
Brazil has made great progress in regulation and banking solidity. Indicators such as LCR (Liquidity Coverage Ratio) and NSFR (Net Stable Funding Ratio) raised the standard of control.
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In practice, however, liquidity management requires a much greater level of depth.
Some questions, although they seem basic, need to be asked more frequently:
- Is the funding base sufficiently diversified?
- Is there a relevant concentration in a few depositors or channels?
- Can assets classified as liquid withstand a systemic stress scenario?
- Are contingency lines, in fact, actionable in times of need?
Liquidity does not fail gradually. When the problem appears, reaction time is already limited.
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Two factors increased the sensitivity of the topic. The first is the greater fragmentation of the system. More institutions mean more competition for funding and, often, greater pressure for accelerated growth. The second is speed. In a digital environment, withdrawal and transfer decisions occur within minutes. The perception of risk spreads quickly and, with it, the movement of resources out.
The current context transforms liquidity into a much more dynamic risk than in the past.
Liquidity is a strategic decision
In medium-sized banks, a common mistake is not having a systemic view of all impacts on liquidity.
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In practice, it is directly impacted by commercial and strategic decisions:
- aggressive fundraising campaigns;
- accelerated growth without funding diversification;
- concentration on specific customer niches;
- stretching assets to gain margin.
Each of these decisions directly affects the resilience of the balance sheet.
Therefore, liquidity needs to be on the agenda of senior leadership and not just in technical reports.
Discipline in favorable times
Abundant liquidity environments tend to reduce the perception of risk.
It is at this moment that wrong decisions are often made: reducing mattresses, increasing exposure and prioritizing short-term returns.
But liquidity is essentially a subject of discipline. Maintaining high-quality assets and adequate buffers is costly, but the cost of not having liquidity is incomparably greater.
The central point: governance
The growth of the Brazilian financial system is a relevant achievement. But it requires an equivalent evolution in governance.
Monitoring liquidity is not just about monitoring indicators. It is to guarantee:
- integrated vision between strategy and risk;
- ability to respond quickly in adverse scenarios;
- transparency in communication with the market;
- consistent discipline throughout the cycle.
What remains for leadership
The recent discussion in the sector should not be treated as an isolated event. It reinforces a permanent and consistent agenda. Liquidity is the type of risk that rarely appears in the best of times, but that defines survival in the worst.
In a broader, more competitive and faster system, growing well necessarily involves treating liquidity as a strategic priority and not as a regulatory obligation, but as a basis for trust and business continuity.
