Assistant Professor of Economics Felipe Rezende was recently quoted by Valor Economico, Brazil’s largest economic, finance and business newspaper, on the role of public banks played after the 2007-2008 global financial crisis. The article, “Why Does Brazil’s Banking Sector Need Public Banks?,” examines the stability and resilience of Brazil’s banking system in the face of the 2007-2008 global financial crisis, and the question of whether it is possible that the alternative approaches followed by some developing countries might provide an indication of more stable regulatory approaches.
“The 2007-2008 global financial crisis has shown the failure of private finance to efficiently allocate capital to finance real capital development,” says Rezende. “The resilience and stability of Brazil’s financial system has received attention, since it navigated relatively smoothly through the Great Recession and the collapse of the shadow banking system. There has been much discussion about how to support private long-term finance in order to meet Brazil’s growing infrastructure and investment needs.”
Much of Rezende’s work has focused on monetary theory and policy macroeconomics, financial instability, and economic development. Currently, he is coordinating a project titled “Financial Governance, Banking, and Financial Instability in Brazil: Analysis and Policy Recommendations.” Supported by the Ford Foundation, Rezende is conducting research, grounded in the theoretical framework of Hyman Minsky, on the destabilizing effects of stability on financial structures and the need to redesign the regulatory structure to continually meet its objectives of financial stability and providing finance for development.
“The research effort is investigating the structure of the Brazilian financial system and its regulatory framework, highlighting their recent changes in order to identify the – old and new – sources of stability and instability,” explains Rezende. “It also aims to provide policy recommendations for reforming Brazil’s financial architecture in order to increase systemic stability as well as the ability to provide funding for development and innovation by the public financial system and by private finance.”
Rezende is organizing a public conference to be held in Brazil later this year to disseminate the findings of the first phase of his research and to promote dialogue with and receive feedback from policy makers representing relevant constituencies.
Rezende is a research fellow at the Multidisciplinary Institute on Development and Strategies (MINDS). His areas of teaching and research include macroeconomics, money and banking, monetary economics, and economic development. He holds an M.A. and a Ph.D. in economics with a specialization in monetary theory and financial macroeconomics from the University of Missouri-Kansas City.