Central banking reform and overcoming the moral hazard problem: the case of Brazil

ABSTRACT The implicit assumption that governments will bailout financial institutions under distress can generate negative incentives for the development of a sound financial system. This paper begins from the premise that these negative incentives, which create a situation of moral hazard, is essentially a political problem rather than a technical problem over generating correct institutional incentives. In the Brazilian case, we argue the current administration of Fernando Henrique Cardoso was only able to significantly reduce its moral hazard problem in the financial sector through distancing its political relationship with two important political actors: the private financial sector and state governors. The ability of the government to eliminate the implicit assumption of an eventual Central Bank bailout over public and private commercial banks was only made possible through a series of political conditions, which includes the end of hyper-inflation under the Real Plan, that reduced the government’s dependence upon those two important political actors.

摘要 政府会对陷入困境的金融机构实施救助这一隐含假设，会对健全金融体系的发展产生负向激励。本文基于以下前提展开研究：这类催生道德风险（moral hazard）的负向激励，本质上属于政治问题，而非关乎构建合理制度激励的技术问题。以巴西为研究案例，本文认为费尔南多·恩里克·卡多佐（Fernando Henrique Cardoso）本届政府之所以能够显著缓解金融领域的道德风险问题，核心路径是切断其与两大关键政治主体——私人金融部门与各州州长——的政治关联。政府得以消除“中央银行最终会为公立与私立商业银行提供救助”这一隐含假设的可能性，有赖于一系列政治条件，其中包括通过雷亚尔计划（Real Plan）终结恶性通胀，这一举措降低了政府对上述两大政治主体的依赖。