Durigan: Governor who approved fraudulent BRB operations is responsible

The Minister of Finance, Dario Durigan, said that the responsibility for the breach in the BRB (Bank of Brasília) lies with the government of the Federal District, "mainly the governor", referring, although without mentioning him by name, to Ibaneis Rocha (MDB).

"The responsibility lies with the GDF [government of the Federal District], especially the governor who authorized these, to say the least, fraudulent transactions", stated the minister.

The statement was made by Durigan during an interview with Veja magazine, on Monday night (1st).

Also according to the head of Finance, the GDF asked the government for the BRB breach to be resolved with Union resources, a possibility that the minister classified as "inadmissible".

Ibaneis Rocha was in charge of the DF Executive during BRB's operations with Banco Master, which caused losses estimated at R$ 8.8 billion to the state financial institution in Brasília. He left office in April with the aim of running for the Senate this year.

After the disruption caused by links with Master, BRB sought ways to recover its liquidity and assets. Last week, the bank closed an agreement with the Union to obtain a loan of R$6.5 billion from the FGC (Credit Guarantee Fund).

Durigan said he hopes that BRB will be able to honor its commitments and fulfill the agreement made. According to him, the breach was the result of "irresponsibility" in the bank's actions.

Loan agreement
On Thursday (28), the Union and the government of the Federal District closed the agreement to facilitate a credit operation for BRB. Negotiations began on Tuesday (26), during a conciliation hearing led by STF minister Luiz Fux.

The proposal provides for a loan to the DF government with resources from the FGC and guaranteed by a syndicate of public and private banks.

Crisis at BRB makes funding difficult and worries the financial market | MONEY REVIEW

Two funds from the Federal District will be used as guarantee in case of default by the local government. They are:

- FPE (State Participation Fund);
- FPM (Municipal Participation Fund).

The GDF will capitalize up to 16% of the Federal District's current net revenue in the BRB, which amounts to around R$6.5 billion. The regional bank needs a capitalization of at least R$6.6 billion to replace its losses.

The loan will be for 15 years, with a grace period of two. The counter-guarantee will be granted by S1 banks, which are large financial institutions whose size is equal to or greater than 10% of GDP (Gross Domestic Product). There will be no transfer of federal resources or guarantees from the Union.

*Under the supervision of João Nakamura

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Source: CNN