Senate committee approves nominees for Central Bank directorates

The Economic Affairs Committee (CAE) of the Senate approved, this Tuesday (4), the appointment of Gabriel Galípolo and Ailton de Aquino Santos to the directorships of the Central Bank. The two were nominated by President Luiz Inácio Lula da Silva, respectively, for the positions of Director of Monetary Policy and Supervision of the bank.

Galípolo was approved by 23 votes to 2 and Aquino Santos by 24 to 1. The names of the two candidates go on to be voted in the plenary of the Senate, which has the final word on the nominations.

Graduated in economic sciences, Galípolo was the executive secretary of the Ministry of Finance. During the sabbath, he said he is open to dialogue and will face the challenge of reconciling monetary and fiscal policies.

Galípolo listed a series of measures adopted by the ministry, such as the elaboration of the new fiscal framework and solutions to reduce the primary deficit, and said that these would generate a significant improvement in the economic environment and remove arguments such as that “the people do not fit into the budget” of the Union and that it is not up to an economist to “impose what he understands to be the economic destiny” of the country, without considering the “democratic will” of the elected representatives.

“For a long time, I think that we economists used the need for technical discussion to try to interdict economic or economic debate as a space for democratic will or public debate. It is not up to any economist, no matter how excellent he may be, to impose what he understands to be the economic destiny of the country in spite of the democratic will and of its elected representatives”, he said.

Galípolo also spoke about the proposal to create a common currency for Mercosur and told the senators that it is not intended to replace national currencies, but to facilitate free trade relations and economic interaction between the bloc’s countries.

It is not the idea of ​​a currency to replace national currencies, but rather a unit of account and a means of payment that will ensure viability and facilitate the relationship between these countries, he explained.

Oversight

When questioned, Ailton Santos mentioned the challenge of supervising more than 1,500 financial institutions in the country and said that maintaining the quality of work requires material resources, but mainly human resources, that is, highly trained employees. According to Santos, who is a career employee at the bank, the inspection area at the BC has been shrinking over the last 10 years.

“During this period, the number of institutions increased by 15%, the financial system’s assets increased by 255 in real terms, financial products became significantly more complex and new attributions were delegated to the Central Bank. There was no increase in the number of servers. On the contrary, 10 years ago, we had 1,100 servants in the supervision area, today (the number) does not reach 650. Almost a third of these can retire or are able to retire next year. The average age of the supervisory area is around 50 years old, standard in the rest of the Central Bank,” he said.

Santos pointed out that, at the same time, serious asymmetries are being faced between the remuneration of BC servants and other public administration positions similar to those of the institution. “It weakens the house,” he emphasized.

He also cited the recent banking crises in the United States, with the Silicon Valley Bank and the Signature Bank, and in Europe, with the Swiss bank Credit Suisse, to defend a leadership role for the BC in supervising the international financial system.

“Brazil, in this field, has full conditions to remain a leader, including with effective participation in the processes of regulation and supervision of global financial markets, which are increasingly complex, integrated and interdependent”, he added.

Despite this external scenario, Santos pointed out that the measures adopted by the government have generated a positive environment, which already appears in financial market projections, such as those in the Focus bulletin.

Yesterday (3), the financial market increased the growth forecast for the Gross Domestic Product (GDP, sum of all goods and services produced in the country) for this year for the eighth time. According to a projection by Boletim Focus, the country will grow 2.19% in 2023. A week ago, the forecast was for growth of 2.18%. For next year, there was also an increase in the GDP forecast to 1.28%, compared to 1.22% last week.

For inflation, the bulletin maintained the downward trend for the seventh consecutive week. According to the bulletin, the Extended Consumer Price Index (IPCA) should close the year at 4.98%. A week ago, the market projection was that inflation would stay at 5.06%. in 2023. Four weeks ago, the forecast was 5.69%.

“These movements demonstrate the degree of confidence of economic agents and the population in the economic management of the current government. I am confident that we are entering the virtuous circle and that the Central Bank will contribute to the consolidation of a more auspicious scenario for the economy and society as a whole”, he said.