On Monday, Gabriel Galípolo, the President of the Central Bank of Brazil, addressed the ongoing confusion surrounding the Master Bank case. He emphasized that allegations regarding the legality of offering yields higher than the market rate have contributed to misinformation in public discussions. Galípolo clarified that such offerings do not, by themselves, warrant intervention or liquidation of the bank, as there are no specific regulations prohibiting these types of financial practices.

He explained that criticism suggesting that the bank should be liquidated due to the issuance of CDBs (Certificados de Depósito Bancário) with higher rates than the CDI (Certificado de Depósito Interbancário) is misplaced. Instead, the Central Bank identifies the real issues at stake as being related to liquidity challenges, concerns over asset quality, and suspicions tied to credit portfolios. These factors prompted the Central Bank to increase its supervision efforts, especially with an eye towards the end of 2024.

The commentary from Galípolo sheds light on the complexities of financial regulation in Brazil, particularly regarding how financial institutions operate in a competitive market while ensuring compliance with banking laws. His statements may be indicative of the Central Bank's approach to navigating these challenges, signaling a call for more informed discussions rather than assumptions based on partial information about financial instruments and banking stability.