Leandro Vilain, CEO of ABBC (Brazilian Banks Association)argues that the financial system does not benefit from high interest rates.
“High interest rates consume income, consume repayment capacity, increase defaults, reduce economic activity”, he assessed in an exclusive interview with CNN Money.
According to Vilain, what the financial system really expects is “sustainable economic growth, employment, income and increased productivity.”
The quality of credit taken out by consumers is also an important factor. Vilain explains that real estate or work financing are investments in productive capacity, which is positive.
However, this can worsen the problem.
Debt scenario
Brazil faces a chronic debt problem.
considered quite high, and default rates for financial institutions have been growing proportionally.
According to Vilain, debt is a complex phenomenon that goes beyond the simple offer of credit.
he states.
The ABBC CEO explains that the country is experiencing the results of a , which was expected, but highlights that these rates are far above what the financial system would like.
Financial education and economics
Vilain points out that the solution involves financial education and a positive expectation of economic activity in the country.
“Again, this consumes income, you need to maintain a capacity for productive jobs, income-generating jobs and increased productivity”, he highlights.
