Mantega officially joins Rousseff cabinet, with goals of continuity, less expenditure

- Monday, January 3, 2011

Mantega officially joins Rousseff cabinet, with goals of continuity, less expenditure

Pledging to maintain economic fundamentals but reduce government spending, Brazilian finance minister Guido Mantega has been officially sworn in as part of the cabinet of President Dilma Rousseff, who took office Saturday (Jan 1).

Mantega, who began his tenure as finance minister in March 2006 under now former President Luiz Inacio Lula da Silva, said in a statement that he plans to continue to keep inflation under control.

Brazil's finance ministry holds a strong position in the government and economy at large, overseeing the securities commission CVM and insurance regulator Susep, as well as central bank BCB, which has an informally guaranteed independence from the ministry.

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More directly, the ministry is the sole shareholder in savings bank Caixa Economica Federal (CEF), former reinsurance monopolist and still dominant player IRB-Brasil Re, as well as regional development banks Basa and BNB. It is also controlling shareholder in the country's largest bank, Banco do Brasil (BB).

In reviewing the major events of his time in the position, Mantega pointed to the 180bn-real (US$109bn) capitalization of national development bank BNDES, which aimed at taking on the financial crisis and resulting economic downturn of 2008-09.

The finance minister also called attention to the ministry's recent announcement of measures to improve conditions for longer-term credit in the country, particularly for debt instruments related to the large portfolio of major infrastructure projects currently being developed.

Mantega plans to push for better access for farm and personal credit, as well as real estate credit securitization.

In comments in December, the minister said public sector banks would play a smaller role in the economy in coming years, but recent credit data has not yet shown a fall in market share from these banks, which hold 42% of the credit portfolio in Brazil as of end-November, up from 41% in November 2009.