Central Bank of Brazil’s mission: Ensuring the stability of currency purchasing power and a sound, efficient, and ‘just’ financial system

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Abstract

This study assesses the convenience and timeliness of making changes to the Central Bank of Brazil’s mission. We undertake this analysis from the normative and practical approaches and consider the perspective of inclusive development and the National Financial System’s role to be the main determinants of the selected strategic solution. The insertion of justice into the institutional mission of the Central Bank of Brazil not only signals a new normative proposal for public policies in this arena but also publicly compromises all agents, suggesting an agreement that engenders the expectations of reciprocity and increased legitimacy. The analysis is conducted through the political philosophy lens, based on the works of Rawls (1971, 2001) and Sen (1992, 2000, 2009). This approach focuses on neutralizing pre-existing views, as the purpose of this study is not to expand current results, but to question the governance structure of the National Financial System to select priorities and implement them. The advent of technology innovations emphasizes the opportunity for improvement, highlighting its risks and benefits. Therefore, the potential contribution of this study is to provide a policy-making alternative to promote publicly agreed objectives through governance structures.

Keywords: Central Bank, Governance, Development, Justice

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

Disclaimer: The views expressed in this work are those of the author and do not reflect those of the Central Bank of Brazil or its members.

Acknowledgments: The author is thankful for the important contributions of Sidney Soares Chaves, José Renato Nunes Barros, Gustavo Jorge Laboissière Loyola, Cristiane Alkmin Junqueira Schmidt, Marcelo Luiz Curado and Eduardo Angeli. However, any possible remaining mistakes are the author’s own responsibility. The author also thanks the Central Bank of Brazil for the financial support provided; the Federal University of Paraná for the opportunity to learn and discuss new ideas; and Tereza Baron and Taylor & Francis Editing Services for their valuable backing.

JEL Classification: G28, H11, M14, O38

Received: 20.10.2020
Accepted: 16.12.2020
Published online: 18.12.2020

How to cite this paper: von Borowski Dodl, A. (2020). Central Bank of Brazil’s mission: Ensuring the stability of currency purchasing power and a sound, efficient, and ‘just’ financial system. Risk Governance and Control: Financial Markets & Institutions, 10(4), 44-56. https://doi.org/10.22495/rgcv10i4p4