December 1, 1992
by Claudio Prado and Murilo Aragão
Some strange rumors involving Fernando Collor de Mello’s brother Pedro circulated the week of May 18. These rumors said that the President’s brother had recorded an extensive interview for Veja (a major Brazilian magazine) disclosing a scandalous financial link between the president and his former campaign treasurer, Paulo César Ferias (aka PC), then a wealthy entrepreneur and consultant.
Leakage of some details of the interview caused the São Paulo stock exchange index, Bovespa, to drop 6% and 2% on May 21 and 22, respectively. Despite the anxiety, most market participants thought this would be just another small political crisis not uncommon in Brazil.
The events leading up to the President's ouster had varied impacts on Brazilian markets and debt