Financial Stability Board (FSB) – Peer Review of Brazil, Nov 2024

The Financial Stability Board (FSB) has published its second peer review of Brazil, focusing on the regulation and supervision of investment funds. The report highlights that Brazil's investment funds sector has grown significantly, reaching R$8.8 trillion in assets under management as of March 2024, representing 80% of the country's GDP. This growth is comparable to advanced economies and is the highest among developing nations. The FSB commends Brazilian authorities for modernizing and strengthening the regulation and supervision of investment funds, including measures to limit leverage and enhance liquidity risk management. However, the review also notes areas for further improvement, such as increasing resources for the Securities and Exchange Commission of Brazil (CVM) to effectively regulate and supervise the expanding sector. Additionally, the FSB recommends enhancing system-wide monitoring of financial stability risks associated with investment funds and updating the regulatory framework to address emerging challenges.