Proceedings of the 15th International Academic Conference, Rome

BANKING CONCENTRATION, INTEREST RATES, AND GROWTH IN BRAZIL

ALEXIS CAVICHINI

Abstract:

Between 1995 and 2014 Brazil’s financial system total asset increased from US$ 650 billion, to US$ 3.1 trillion. A growth of 377%. In the same period, the five largest banks bounced from an average loss of US$ 1 billion in 1995 to an average profit of US$ 25.5 billion in 2014. High interest, for enterprises and individuals, have been a major obstacle to the growth of the country. In the last twenty years, average GDP growth in Brazil was 2.6% p.a. This result is meaningfully lower than other developing nations. The objective of this paper is to understand this contradiction between Brazil’s financial system and other segments of the economy, and find answers, opportunities, possibilities, and solutions, which allow Banks to operate at a lower cost, leveraging the economic development of the country.

Keywords: banking concentration, interest rates, brazil, growth, GDP

DOI: 10.20472/IAC.2015.015.041

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