Roberto Campos Neto said he was considering outsourcing the monetary authority’s asset management activity
07/26/2023
/i.s3.glbimg.com/v1/AUTH_37554604729d4b2f9f3eb9ad8a691345/internal_photos/bs/2023/O/h/lldPGbQNWKKseRGXBOhw/sessao-solene-tcu-mcamgo-abr-150220231818-11.jpg)
Roberto Campos Neto — Foto: Marcelo Camargo/Agência Brasil
The Federal Court of Accounts (TCU), a public spending watchdog, will investigate whether comments by Central Bank President Roberto Campos Neto regarding foreign exchange reserves may contain irregularities. In an interview with an asset manager, the head of the monetary authority said he was considering outsourcing the bank’s asset management.
The remarks provoked a swift political and institutional reaction. On Monday, TCU’s deputy attorney general Lucas Rocha Furtado requested an audit of the case. An investigation has begun under the supervision of TCU member Benjamin Zymler.
Mr. Furtado claims that Mr. Campos Neto’s alleged claim poses a risk to the country’s ability to meet its financial obligations. According to him, the management of forex reserves is a “typically governmental activity,” which makes it impossible for the private sector to intervene, as this could jeopardize the country’s “sovereignty.”
“Given all the risks involved, in my opinion, it is inadmissible to outsource the management of Central Bank assets, especially in relation to the management of Brazil’s foreign exchange reserves,” said the prosecutor. This possibility, therefore, requires the mandatory and immediate action of the Federal Court of Accounts to determine the “detailed and thorough investigation of the facts,” he added.
“We had a large outsourced management program. Today, much of the management is not outsourced, but we are open to outsourcing management, mainly because we are looking at new asset classes,” Mr. Campos Neto said in an interview to BlackRock Brasil. According to him, one hypothesis would be to use external asset management to manage “new assets.”
Foreign exchange reserves act as a savings account for the country that can be used in times of great volatility. According to the Central Bank, Brazil’s reserves now total $345.8 billion. The Central Bank did not reply to a request for comment.
*Por Murillo Camarotto — Brasília