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Plenary session of the Federal Senate during ordinary blended deliberative session. Agenda. In a blended deliberative session, the senators vote: MSF 55/2020, a message that addresses the nomination of directors of the Brazilian Securities and Exchange Commission (CVM); MSF 59/2020, message referring to the appointment of Minister of the Federal Supreme Court (STF); and PRS 44/2020, draft resolution that creates the Chico Xavier do Senado Award, for charitable social actions. Board of Directors: Senator Omar Aziz (PSD-AM); President of the Federal Senate, Senator Davi Alcolumbre (DEM-AP); Luiz Fernando Bandeira from Mello Filho. (Photo: Pedro França / Senate Agency)
SÃO PAULO – The plenary session of the Federal Senate approved, on Tuesday (3), a complementary bill 19/2019, which grants formal autonomy to the Central Bank. Senator Telmário Mota’s (PROS-RR) report received 56 votes in favor and 12 against. After deliberating on the most outstanding aspects, the text goes to the Chamber of Deputies.
The bill, drafted by Senator Plínio Valério (PSDB-AM), establishes that the president and the eight directors of the monetary authority will have fixed terms of four years, with periods not coinciding with that of the President of the Republic, and appointments distributed throughout the term. presidential. All can be reappointed only once. Today, BC members can be freely appointed and removed by the representative.
The text establishes that the directors may be exonerated for “insufficient performance”, by decision of the National Monetary Council (CMN) – formed by the president of the BC, the Minister of Economy and the special secretary of the Treasury -, with the approval of the absolute majority of the federal Senate. It also provides for a six-month quarantine for former directors, who cannot carry out any professional activity with financial institutions during the period. During the period, there would be a compensatory remuneration in charge of the BC itself.
As his alternate, the rapporteur accepted amendments that expanded the mandate of the monetary authority, maintaining the commitment to price stability, but incorporating the auxiliary missions of “ensuring the stability and efficiency of the financial system”, “smoothing fluctuations in the level of of economic activity ”and“ promotion of full employment ”.
The inclusion of other objectives for the monetary authority is the result of a negotiation, incorporating a demand from parliamentarians who are more resistant to the Central Bank’s autonomy agenda and even from members of the opposition. The movement was articulated by Senator Eduardo Braga (MDB-AM), who discussed the issue with members of the institution itself.
“In my last report to that Commission, I highlighted that the assignment of a double mandate would open a space for the Central Bank to be affected by the political cycle, potentially being more pressured to stimulate economic activity and employment in the short term. , pointing to political and electoral benefits, to the detriment of higher inflation in the near future (dilemma between short and long term) ”, says Senator Telmário Mota in his report.
“On the other hand, the new interactions that occurred after the conclusion of the analysis of the matter by the Economic Affairs Commission, however, with the participation of Senator Eduardo Braga and representatives of the Central Bank, made it possible to understand that it is possible to contemplate the actions of the Central Bank. legitimate concerns about full employment, without giving rise to the risks considered in my last demonstration ”, he adds.
The search for full employment and attention to fluctuations in the level of economic activity, however, in practice are presented as secondary attributions of the monetary authority, which brought the nickname of double (or triple) “light” mandate. In the words of the rapporteur, the insertion of these objectives in the law also has “the merit (…) of guaranteeing legal security for the multifaceted action of the monetary authority”.
In the report, Senator Telmário Mota also drew attention to the expected results with the approval of the proposal. “This is an important issue, especially in electoral years and when there are governments with populist prejudices, whether from the right or the left,” he says.
“The simple legal provision that there is formal autonomy, with the coincidence of mandates with the President of the Republic, even avoids misinterpretations that the Central Bank of Brazil has not managed to increase the basic interest rate to contain inflation due to political pressure , partisan or electoral, “he says.
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