Brazil: Financial System Stability Assessment

The Brazilian financial system has undergone significant change since the 2018 FSAP. While the system remains bank-dominated, with two of the six largest banks state-owned, technology-driven change has brought new digital entrants and stronger competition in banking services. Financial markets have grown significantly, with strong growth in corporate bond markets and derivatives, and a nascent but fast-growing structured credit market alongside intensifying retail trading. Payment services have been revolutionized by the Pix system, and crypto market activity is growing. Household and corporate indebtedness have increased despite elevated borrowing costs.