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BNDES and capital markets: clarifications for the public debate in Brazil

Author

Listed:
  • Ricardo Barboza
  • Ernani Torres
  • Norberto Montani Martins
  • Letícia Magalhães
  • Thiago Pereira
  • Victor Libera

Abstract

Since 2017, Brazil’s capital markets have experienced significant expansion. Theprevalent view attributes this trend to the downsizing of the Brazilian Development Bank(BNDES). This paper proposes an alternative interpretation through a comprehensive analysisof data on BNDES and capital market operations. Our findings reveal substantial differences in borrower profiles, loan terms, standards on impact assessment of tax incentives, allocationof resources, and the procyclicality of operations. We conclude that the substitutionof the BNDES for the capital market is largely overestimated and that there are negative consequencesthat are commonly overlooked. JEL Classification: G18; G20; G21; O16.

Suggested Citation

  • Ricardo Barboza & Ernani Torres & Norberto Montani Martins & Letícia Magalhães & Thiago Pereira & Victor Libera, 2025. "BNDES and capital markets: clarifications for the public debate in Brazil," Brazilian Journal of Political Economy, Center of Political Economy, vol. 45(2), pages 320-340.
    • Handle: RePEc:ekm:repojs:v:45:y:2025:i:2:p:320-340:id:2507
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    More about this item

    Keywords

    Capital market; BNDES; additionality; crowding-out; MSMEs;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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