Do banks need high interest rates to make a profit? This is the question of many people in their banking relationships.
The President of the Republic Luis Inácio Lula da Silva criticized the Central Bank and its policy of high interest rates.
In response, the President of the Brazilian Federation of Banks, Isaac Sidney said that banks do not need high interest rates to make a profit.
Anyway, in the face of this giant fight, the population watches everything, however, do banks need high interest rates to make a profit?
The truth is that year after year banks make astronomical profits in our country.
What was the solution proposed by the president of Febraban?
First, in his statement in Lisbon, the president of the Federation of Banks said that what is needed is to lower the cost of credit.
He also said that for interest rates to fall, not only banks need to work. Despite not having made a direct reference to the President, everyone understood what was said.
The rise in interest rates is due to the large number of defaults and the lack of existing security for banks. In this way, as there is no guarantee of receipt, the interest ends up getting high.
Thus, the population suffers from the results, paying high interest rates to obtain credits that often become a way of survival.
Especially after such difficult times experienced during the pandemic. Sideny said it is shameful that we are in the position of the least secure in the world.
Understanding that having credit in Brazil is in fact very expensive.
What do banks stand for?
Do banks need high interest rates to make a profit? The banks defend a low interest rate, to democratize credit in Brazil.
Sidney also stated that banks are doing their part by granting 15 trillion in loans. Pending the government's tax and administrative reform.
The President of Febraban also said that a reform of consumption was necessary, he said that private sector participation was necessary.
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Understanding that they need to propose a new fiscal framework, that is, a set of rules that will govern public accounts.
Thus, Sidney understands that for the population to finally benefit from the low interest rates, a partnership is needed.
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Only by uniting the banks and the reforms that the government needs to approve will this be possible.
The necessary role
Finally, Sidney also defended that banks need to play a certain role. Offering the government a proposal for a fiscal framework.
Continuing in the direction of fiscal responsibility, not advocating a race for public accounts to sustain themselves. But managing to unite the fiscal and the social, two extremely necessary things.
In this way, Sydney seemed well balanced to me, however, without ceasing to share with the government the responsibility for lowering interest rates.
Making it clear that it does not depend only on the banks and the bank's profit is not only linked to the rise in interest rates.
With this response, Sidney hopes that the government will mobilize to get the necessary reforms approved. On the other hand, President Lula expects a greater effort from the banks.
