The BC president also defended the actions of the monetary authority in the case, accused of billion-dollar fraud in the financial system
The creation of new investment portfolios to raise money on the market through Banco Master, in the midst of the financial crisis. liquidity of banker Daniel Vorcaro’s institutionwas what drew the attention of the Central Bank (BC) that something was wrong in the bank’s management, said this Tuesday (19) the president of the BC, Gabriel Galípolo, in a hearing of the Senate’s Economic Affairs Committee (CAE).
Bank liquidity is the a bank’s ability to have cash on hand to pay what you owe in the short term.
“If you have a bank with liquidity difficulties, you don’t build a portfolio. If you have money difficulties, you sell a portfolio. That’s fine, but how are you selling a new portfolio? This is what caught the BC’s attention immediately”, explained Galípolo to the senators.
O BC president defended the monetary authority’s actions in the Master caseaccused of billion-dollar fraud in the financial system. Galípolo said that, in November 2024, a term of commitment was signed with Master, which would have six months to adapt its actions from the point of view of governance, capital and liquidity of the bank.
Master then began to raise funds in the market, with guarantees from the Credit Guarantee Fund (FGC), but begins to have restrictions on capture by the FGC. Then, Banco Master tries to raise funds from investment funds, but without success.
“Immediately, he starts trying to carry out those processes that he had already been doing since 2023 – some portfolio sales, especially to BRB, but he intensifies these portfolio sales”, explained Galípolo.
The sale of Master’s investment portfolios to Banco Regional de Brasília (BRB), public bank linked to the Government of the Federal District (GDF)is investigated by the Federal Police, which suspects fraud in around R$12.2 billion in credits sold. BRB even tried to buy Master, but the operation was not authorized by the BC.
From January 2025, when the Master begins to form new investment portfolios amid liquidity problems, the BC creates a specific group to analyze these portfolios. THE extrajudicial liquidation of Banco Master takes place ten months later, on November 18, 2025after the purchase of Vorcaro’s institution by BRB was denied.
Before liquidation, the Banco Master also proposed another solution, which would involve supposed Arab investors who were not known to the BC president, Gabriel Galípolo.
“When there is a rejection of the purchase of BRB, the bank presents a second request for a letter to the FGC and the Central Bank, saying that it would carry out an organized exit from the market, that is, it recognizes that the bank is no longer viable, but that it would carry out a self-liquidation of the bank, passing it on to these Arab investors. I was never aware of them”, added Galípolo.
Systemic risk
The president of the Central Bank once again defended, even though the liquidation of Banco Master did not create systemic risk in the financial market that could result in a general banking crisis.
“It is a bank that does not offer systemic risk, it is less than 0.5% [do sistema bancário]. It seems to me that what has caught people’s attention is what was being done with the money that was in Banco Master”
Gallipoli further considered that the liquidation of the bank is not a punishment for the managers of that institutionsince the public is harmed.
“Punishing an institution that was a victim of bad managers is a mistake. It is doubling the punishment on those who are victims, which are, including, the account holders of that institution. So, liquidating an institution is not punishing the managers. Liquidating an institution, you will only do that because that institution has reached a specific point”, he said.
