A State-of-the-Art System

Aug 1, 2002

Brazil's financial system has been highly automated for more than a decade, but in April the country addressed remaining weaknesses in its payment infrastructure and now has global standards in place.

In April 2002, the Brazilian Central Bank adopted a new regime that brings the country's payment and securities settlement system in line with recommendations made by key forums and associations such as G-30, BIS, CPSS-IOSCO Task Force and ISSA1. This milestone is important because Brazil now complies with international best practices and its payment system now is, one of the most modern in the world.

Rather than take a gradual step-by-step approach to reorganizing its payment and settlement infrastructure, the Brazilian Central Bank adopted a leapfrogging strategy opting to implement global standards benefiting from the international experience. The Central Bank's strategy brought about a significant and rapid reduction of systemic risk, as well as a considerable improvement of safety and efficiency of the Brazilian financial infrastructure, which now performs far beyond the minimum standards required by the financial community.

Partially as a consequence of hyperinflation,...

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