Brazil tightens prudential rules, adds individual liquidity requirements for banks
BRASILIA, May 30 (Reuters) - Brazil's National Monetary Council (CMN) tightened prudential rules on risk management, liquidity and capital for financial institutions, introducing individual requirements to complement existing rules for conglomerates.
According to a central bank statement on Friday, the changes approved by the country's top economic policy body strengthen the stability of the financial system and align with the international Basel III regulatory framework as well as recommendations from the IMF and World Bank.
The government will introduce a liquidity requirement taking effect in July 2026 for standalone financial institutions, aligning with the methodology already used for financial conglomerates.
The rule will apply to institutions that are part of conglomerates classified under "Segment 1," which includes large and systemically important entities subject to stricter regulatory standards.
Further changes to integrated risk management, effective in September, will seek to ensure timely liquidity transfers among institutions within the same conglomerate, the central bank said.
Meanwhile, the leverage ratio calculation has been updated and expanded to cover all institutions except those with a low-risk profile. Its implementation will be phased in between July 2026 and January 2028.
According to the central bank, the new requirement will apply on both consolidated and individual bases, including to payment institutions that lead large conglomerates integrated by financial institutions.
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