Abstract
The Brazilian money market has developed rapidly since the early 1970s. In part this development can be attributed to the strenuous efforts of public sector and private sector agencies to promote the ‘open market’. During the latter half of the 1970s especially, the Ministry of Finance operated in a most intelligent way in sponsoring legislation aimed at financial market development. Nevertheless problems appeared, and progress was hampered. At times prices surged ahead of projected inflation rates, yielding investors negative real returns in some money market assets. Persistent inflation placed a premium on shortening the maturities of money market instruments, as a defence tactic. Parallel shortenings of wages contracts and other patterns of price adjustment soon followed, magnifying tendencies towards market disequilibrium.
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Notes
Angela Bittencourt, ‘Leilão de OTN na Quinta-feira’, Gazeta Mercantil, 24 June 1988, p. 18.
Central Bank of Brazil, Brazil Economic Program, vol. 16, March 1988, pp. 64–5.
Comissão Nacional de Bolsa de Valores, Legislação Sobre Mercado de Capitais, Rio de Janeiro, 1986, pp. 503–17.
Andima, Operações Compromissadas — Legislação Vigente, Assessoria Técnica, 9 June 1988, pp. 2–3.
Andima, Depositos Interfinanceiros, Legislacao Vigente, 6 June 1988, p. 1.
Antonio Carlos Lemgruber, Uma Análise Quantitativa do Sistema Financeiro no Brasil, IBMEC, Rio de Janeiro, 1978, p. 52.
Andima, Retrospectiva 1988, Jan–June 1988, p. 5.
An interesting account of the early development of this financing mechanism can be found in Mario Henrique Simonsen, ‘Inflation and the Money and Capital Markets of Brazil’, in H. Ellis (ed.), The Economy of Brazil (University of California Press, 1969) pp. 146–50.
Andima, Fundos de Aplicações de Curto Prazo — Legislação Vigente, Assessoria Tecnica, 1988, pp. 5–6.
Jo Galazi, ‘As Muitas Opçôes de Lucros’, Bolsa, July 1988, p. 11.
Angela Bittencourt, ‘Leilão Eletronico dá Certo: OTN Sai a 4.5%’, Gazeta Mercantil, 28 July 1988, p. 20.
Angela Bittencourt, ‘A Venda do Direito de Compra’, Gazeta Mercantil, 28 July 1988, p. 20.
Banco de Boston, Newsletter Brazil, 2 May 1988, p. 4.
Nelson Carrer Junion, ‘Para Proteger Importador BM&F Defende a Criação de Bônus Com Lastro Ouro’, Gazeta Mercantil, 28 July 1988, p. 22.
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© 1990 Francis A. Lees, James M. Botts and Rubens Penha Cysne
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Lees, F.A., Botts, J.M., Cysne, R.P. (1990). The Money Market. In: Banking and Financial Deepening in Brazil. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-10639-4_8
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DOI: https://doi.org/10.1007/978-1-349-10639-4_8
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