The Public Ethics Commission in Brazil has started reviewing a complaint against Roberto Campos Neto, the former president of the Central Bank, pertaining to supposed shortcomings in his oversight of Banco Master. This action follows a formal representation lodged by federal deputy Lindbergh Farias, who alleged that the Central Bank had been made aware of the rising risks associated with Banco Master's management by official communication from both the Credit Guarantee Fund and the Brazilian Federation of Banks. The complaint suggests that there was an explicit and documentable awareness of increasing risks related to financial instruments being sold by Banco Master.

In his allegations, Deputy Farias emphasizes the significance of the written communications sent to the Central Bank, which explicitly warned about the dangers posed by high-risk Certificate of Deposit Bonds (CDBs) marketed by Banco Master. The existence of such alerts indicates that the responsible authorities for prudential supervision had a clear understanding of the escalating risk factors associated with the bank’s operations at that time. The implications of this scrutiny into Campos Neto's actions could have broader repercussions not only for him personally but also for the governance and regulatory practices of Brazil's financial institutions.

The case potentially reflects larger issues within Brazil's banking regulation framework, particularly regarding the accountability of financial authorities in managing and mitigating risks posed by banking institutions. With the Ethics Commission's investigation being confidential, the outcomes may either vindicate Campos Neto or set a precedent for stricter oversight of regulatory practices in Brazil's financial sector, reinforcing the need for transparency and accountability among those tasked with protecting the integrity of the banking system.