巴西央行拟提高信用卡资本要求，在巴中资消费金融与零售信贷面临合规重估

Lauro Gonzalez Divulgação .Brazil’s Central Bank is at an advanced stage of studying measures to rein in household debt, which remains near record levels. One option under consideration is requiring banks to hold more capital against riskier types of lending, including credit cards, Valor has learned. Economists, however, question how effective such a move would be in an environment of persistently high interest rates and as expensive forms of credit account for a growing share of household debt. The Central Bank is expected to meet with banking industry representatives in the coming days, people familiar with the matter said. Financial institutions are still trying to understand what measures may be adopted and their potential impact. Brazil’s Central Bank set to curb predatory lending Central Bank plans curbs on costly lending as arrears rise “They [at the Central Bank] are designing the alternatives. We still don’t know what is coming,” one person said. “We will have discussions with the Central Bank to understand what those measures could be,” another source said. Central Bank Chair Gabriel Galípolo may address the issue this Thursday (Sept. 24) during the release of the Monetary Policy Report. He has repeatedly voiced concern about household debt, particularly the rapid expansion of credit-card lending. Capital requirements Industry sources see an increase in the risk weight applied to credit-card lending as one of the more likely options. Under such a measure, banks would have to set aside more capital against credit-card exposure. That would raise the opportunity cost of extending this type of credit and could encourage lenders to redirect capital toward other products. The measure would be aimed at discouraging supply rather than curbing demand. The Central Bank took a similar step 15 years ago, when auto lending was expanding rapidly. The measure helped slow growth in that segment. Analysis: Galípolo says credit, not rates, drove debt buildup Other ideas discussed in recent weeks, including higher reserve requirements or an increase in the tax on financial transactions, known as IOF, appear to have lost some momentum. “That would only raise the cost of credit and would not discourage riskier lines, which seems to be what the Central Bank wants,” one source said. Credit-card growth The regulator has been paying particularly close attention to credit cards. The segment expanded sharply in recent years, driven by greater competition and broader access to banking services, and continues to grow at a fast pace. While total outstanding credit rose 7% in the 12 months through July, the latest available data, credit-card balances for individuals climbed 14.7%. Within that category, revolving credit jumped 20.8%, installment balances rose 11.5%, and purchases paid in full increased 14.3%. Central Bank Monetary Policy Director Nilton David said on Wednesday (Sept. 23) that the measures being studied to improve credit supply are intended to increase transparency, map risks, align incentives and reduce the potential for systemic risk. Without providing details, David said the measures should not be confused with monetary policy. “Everything is being designed and considered by looking at the experiences and existing legislation in other jurisdictions, in other countries. The objective is the mitigation of systemic risks, alignment of incentives and transparency,” he said at an event organized by Safra bank. David added that the rules would not differentiate among types of financial institutions. Financial stability His remarks reinforce the message from the latest meeting minutes of the Central Bank’s Financial Stability Committee, known as Comef, which highlighted the need to address household indebtedness. The committee said the Central Bank planned to adopt measures to mitigate risks associated with more expensive forms of credit. Its guidelines call for “the timely recognition of risks, the gradual accumulation of capital and more sustainable conditions for extending credit to borrowers.” In a recent report, Safra analysts said macroprudential measures are likely to take the form of higher capital requirements for riskier credit products. Bad loans set to rise as high rates strain borrowers They pointed to December 2010, when the Central Bank raised the risk weight on auto loans of up to two years to 150%, at a time when that type of lending was growing at an annual pace of nearly 20%. “We consider this episode a reference point for the type of calibration the current environment may require, rather than a forecast of the exact action. [...] A comparable increase in revolving credit-card balances, unsecured personal loans and overdrafts would be the natural target if the Central Bank opts to act.” A sell-side analyst said a higher risk weight may have limited effectiveness because some of the financial institutions expanding fastest in unsecured lending in recent years are large fintechs that currently have excess capital. That means that even if the Central Bank raises capital requirements, those companies may still find it attractive to continue extending this type of credit as they seek to gain market share. “Another possibility would be to require additional provisioning for certain products for a period of time, which could be more effective,” the analyst said. Household strain Household indebtedness has remained near record levels in recent months. It stood at 49.75% in June, just below the historical peak of 49.92% reached in January. The indicator compares the stock of household debt with income accumulated over the previous 12 months. The household debt-service ratio—the share of disposable income used to service debt—also reached an unprecedented 28.85%. The composition of that burden is drawing additional attention. Of the total, 17.99 percentage points go toward principal repayments and 10.86 percentage points toward interest alone. In other words, interest payments account for 37.6% of the income households devote to servicing debt, also a record. Several factors help explain the growing weight of interest payments, including the Selic, Brazil’s benchmark interest rate, remaining high for an extended period; a shift in the credit mix toward products with wider spreads; and pressures on household budgets, including sports betting. This has occurred even as incomes remain strong and unemployment sits near historical lows. “Even the rise of [instant-payment system] Pix has played a role because it led banks to compete in the credit-card segment by offering larger credit limits. With a population lacking financial literacy and high interest rates, that led to a very bad combination,” said a researcher who studies the subject. Credit supply Lauro Gonzalez, coordinator of the Center for Studies in Microfinance and Financial Inclusion at Getulio Vargas Foundation (FGV), said debt crises typically stem from factors that can be grouped into three areas. The first involves macroeconomic conditions, such as the benchmark interest rate. The second relates to microeconomic factors, including financial education. The third concerns credit supply, such as the widespread availability of credit cards. Gonzalez said the financial industry has changed significantly with the arrival of new players and the inclusion of tens of millions of new users. “Depending on regulation, the ecosystem that is built may have more or fewer models of predatory credit supply,” he said. In an article published in April, Gonzalez proposed seven measures to address the issue. One was precisely the higher regulatory capital and provisioning requirements for riskier loans that the Central Bank is now considering. Another proposal was to create a debt limit for unsecured credit, similar to the 30%-of-income limit used by the industry for mortgage lending. Debt relief On the government side, Finance Minister Dario Durigan recently said officials are studying a new version of Desenrola, the federal debt-renegotiation program. Unlike previous versions, the government would hold a type of auction to buy older consumer debts, between two and five years past due, at a discount, possibly using the structure of federal asset management company Emgea. The debts would then be canceled. Banks see the potential impact of the program as neutral. These are loans that have already been written off as losses and that financial institutions already sell to asset managers specializing in distressed assets. Even if the debts are canceled and consumers have their negative credit records cleared, banks consider it unlikely that they would immediately regain a strong enough risk profile to qualify for new loans. It is also unclear how the program could be implemented while the government is running a primary budget deficit. The Central Bank declined to comment.