Folha Poder55 minutes agoBusiness2 min readBrazil

Governor of DF tries again to talk to Lula to help BRB

Celina Leão has been waiting for a response for three days to obtain approval from the Union and cover the state bank's loss

Quick Look

The governor of the Federal District, Celina Leão, has been trying for three days to arrange a conversation with President Lula to obtain Union approval for a R$6.6 billion loan from the FGC to BRB, a state bank with a loss of more than R$12 billion resulting from the purchase of fraudulent portfolios from Banco Master.
The federal government argues that the DF's payment capacity has deteriorated, classified as grade C by the National Treasury; only states with an A or B rating can obtain a federally guaranteed loan.

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Why It Matters

BRB has been facing a crisis for more than a year after purchasing fraudulent portfolios from Banco Master worth more than R$12 billion. The GDF tried to reach an agreement with the federal government with the STF, without success. The Lula government argues that the DF's payment capacity has deteriorated, classified as grade C by the National Treasury.

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In yet another attempt to help the BRB (Bank of Brasília), the governor of the Federal District, Celina Leão (PP), tries to arrange a conversation with President Lula (PT). However, there has been no response for three days.

It needs the Union's approval to obtain a loan from the Credit Guarantee Fund (FGC) worth R$6.6 billion, to cover the state bank's loss.

Celina tried to talk to the President of the Republic at the beginning of the year, but was unable to do so. He waited for the elections and after the PT victory, he went back to looking for the president's interlocutors.

The governor argues that the BRB has been going through a crisis for more than a year and, even so, it has remained afloat. Therefore, he defends aid to the state bank. The hole was created after the purchase of fraudulent Banco Master portfolios worth more than R$12 billion.

The GDF tried to reach an agreement with the federal government with the STF (Supreme Federal Court), but without success. The Lula government's argument is that local government is showing a tendency to "deteriorate payment capacity".

This is because the DF has a C rating on a National Treasury ladder. Only states with capacity A or B can obtain a loan with a guarantee from the Union. With the guarantee, in case of default, the National Treasury would honor the debt.

What to Watch

AI outlook — possibilities, not facts

President Lula will grant or deny the hearing requested by Governor Celina Leão.
Likely · Within days
The federal government will maintain the position that the DF presents a deterioration in its payment capacity, making it difficult to grant the Union's guarantee.
Likely · Within weeks

Open Questions

When will President Lula respond to the governor's request for a conversation?
What are the specific conditions of the R$6.6 billion loan from the FGC?
Will the DF be able to improve its National Treasury rating from C to A or B?