BRASILIA, March 5, 2026, 09:49 (BRT)
- Bradesco’s preferred shares closed out March 4 at 20.49 reais, gaining 1.44% after the central bank stepped in with fresh liquidity.
- Brazil’s central bank has decided banks can deduct mandatory advance payments to the FGC deposit insurance fund from their reserve requirements, a shift the regulator figures could release 30 billion reais in 2026.
- Banks are on the hook for 84 months of prepaid contributions to the FGC through 2028, after payouts related to Banco Master’s liquidation, Reuters reports.
Banco Bradesco S.A. stock surged in São Paulo on Wednesday after the central bank moved to loosen the liquidity squeeze caused by a fresh bank cash call aimed at bolstering Brazil’s private deposit insurance fund.
Banks now find themselves on the hook to prepay into the Fundo Garantidor de Créditos, or FGC, a directive that lands as Brazil deals with tight credit and persistently elevated funding costs.
The central bank’s latest step may unlock 30 billion reais ($5.7 billion) in 2026, Reuters said on Tuesday.
Banks are compelled by reserve requirements to hold a portion of their liabilities, such as customer deposits, at the central bank.
Bradesco’s preferred shares (BBDC4) finished the day up 1.44% at 20.49 reais. Itaú Unibanco, Banco do Brasil, and Santander Brasil all booked gains too, as investors weighed the implications of the new rule.
The central bank is allowing banks to deduct amounts fronted to the FGC—which are aimed at shoring up the fund’s equity—directly from their required reserves on both demand and time deposits, Reuters reported.
The central bank’s move aims to neutralize the liquidity effect of the advance to the FGC, according to Reuters. Banks will choose how to allocate the deduction between demand and time deposit reserve requirements.
In February, the FGC told institutions to begin making monthly advance payments—a move that followed billion-real payouts to Banco Master depositors after the bank was liquidated under central bank orders, according to Reuters. These payments will run for 84 months, taking the requirement through to 2028.
Bradesco and the other top banks catch a break on cash reserves in the short run with the offset, yet the FGC funding mandate isn’t going away.
There’s a big worry hanging over the fund: if stress ramps up for smaller banks, it could be tapped for more cash, setting off another scramble for emergency money—something the current relief plan may not be able to handle.
