Senate Committee approves nominees for BC and Cade boards

The CAE (Commission on Economic Affairs) of the Senate approved this Tuesday (5th) the names of Diogo Abry Guillen for the post of director of Economic Policy at the Central Bank, with 20 votes in favor and two against, and Renato Dias de Brito Gomes, unanimously, to the Directorate of Organization of the Financial System and Resolution.

Also approved, with 20 votes in favor and two against, the name of Alexandre Barreto de Souza for the post of general superintendent of CADE (Administrative Council for Economic Defense), with a two-year term, and that of Victor Oliveira Fernandes, unanimously, to the post of councilor of the municipality. The nominations are now for analysis and voting in plenary.

This will be the first change in command of the BC since the directors won a fixed term, with the approval of the autonomy of the monetary authority in 2021. The names of Guillen and Gomes were appointed by President Jair Bolsonaro (PL) in December last year and were awaiting Senate hearing, which was twice postponed.

Upon being questioned by the senators, Guillen said that, based on the academic literature, he sees it as beneficial to decouple the monetary policy cycle from the political cycle through BC autonomy and defended the floating exchange rate system in Brazil. “The exchange rate is the first line of defense for international shocks, I defend this conduct”, he said, adding that the international reserves held by Brazil contribute as a “second line of defense”.

When questioned by Senator Fernando Bezerra Coelho (MDB-PE) about the BC’s role in the pandemic, Guillen highlighted the Brazilian authority’s aggressiveness in raising interest rates in the face of inflationary shocks, citing the change in the consumption basket from services to goods and services. bottlenecks in production chains, adding the effects of the war in Ukraine and imported inflation to higher inflation in Brazil.

He said that the BC’s mission is to achieve “low, stable and predictable inflation” and highlighted the projection made by the autarchy that inflation is “close to the target in the relevant horizon of monetary policy”.

Guillen graduated in Economics in 2005 from PUC-Rio (Pontifical Catholic University of Rio de Janeiro), where he also completed a master’s degree in the area. In 2013, she completed her doctorate at Princeton University in the United States. At 39, she has published several articles on economic and financial matters.

Before being appointed to the BC board, he was chief economist at Itaú Asset Management and worked as a professor at Insper (Instituto de Ensino e Pesquisa). In the first postponement of the hearing, Guillen’s personal relationship with banker Fabio Colletti Barbosa, his father-in-law and an independent member of the board of Itaú Unibanco, weighed.

If the nomination is confirmed in plenary, Diogo Abry Guillen will assume the post of director of Economic Policy in place of Fabio Kanczuk, who left the autarchy on December 31, 2021. The role had been held on an interim basis by the director of International Affairs and Management of Corporate Risks, Fernanda Guardado.

Economist Renato Dias de Brito Gomes was appointed to replace João Manoel Pinho de Mello, responsible for Pix, who left the Directorate of Financial System Organization and Resolution after the Copom (Monetary Policy Committee) meeting in February. Since then, the Director of Regulation, Otavio Damaso, has been acting on an interim basis.

In his speech, Gomes stated that the BC must “ensure price stability” and said that the “proper functioning of financial intermediation, that is, the credit, payment and capital markets” will help in the recovery of the Brazilian economy after the crisis. sanitary.

He also spoke about “the enormous gains in efficiency and financial inclusion” with Pix and defended open banking as a tool to increase competition in the financial system.

He spoke again about the open financial system in response to Senator Veneziano Vital do Rêgo (MDB-PB) about the profits obtained by large financial institutions and, in this context, he differentiated banking concentration from competition.

Asked by Senator Bezerra Coelho, citing a report by sheeton the regulation of foreign platforms of Asian origin, such as Shopee and Shein, Gomes spoke about the “need for equality with Brazilian retail”, but that taxing payments is a “not so good” idea, as it would generate distortions.

“It is unfortunate for the country that foreign platforms have access to our market practically without taxation,” he said. “It seems to me that this has more to do with tax loopholes than payment issues,” he added.

Regarding crypto assets, questioned by Senator Mecias de Jesus (Republicans-RR), Gomes spoke about the need for prudential regulation so that financial institutions do not have their balance sheets contaminated by asset volatility.

He also spoke about two other important axes for the cryptocurrency regulation policy: the prevention of money laundering and terrorist financing, with the traceability of resources as a focus, and financial education. “It takes financial education for people to trade crypto knowing what they’re doing,” he said.

Bachelor and Master in Economics from PUC-Rio (Pontifical Catholic University of Rio de Janeiro), he completed his doctorate at Northwestern University, in Illinois, in the United States, in 2010. At 41, Gomes is a professor at the Toulouse School of Economics and researcher at the Center National de la Recherche Scientifique, in France.

The approval of the names to the direction of the BC comes amid a concerted effort by the Senate to unlock nominations made by the government to agencies and regulatory bodies. These votes cannot be done remotely by senators.

On Monday (4), President Jair Bolsonaro nominated 21 names for the summits of regulatory agencies and federal authorities. Throughout this week, there will be at least 19 Sabbaths.

This Tuesday, CAE also approved the two names nominated for the Administrative Council for Economic Defense.

Candidate for the position of General Superintendent of CADE, Alexandre Barreto de Souza holds a degree in Public Administration from UnB (University of Brasília), where he also completed a master’s degree in the same area. He is a PhD candidate in Political Science at the University of Lisbon, Portugal. He has extensive experience in the public service, having worked as an auditor at the TCU (Union Court of Auditors), the Senate and the Federal Revenue Service.

When questioned by the senators, Barreto de Souza said that Cade had no alternative but to accept Petrobras’ agreement for the sale of refineries in 2019, when he was the president of the municipality.

“The agreement was to undo the dominant position of the company. I am convinced that there has always been concern on the part of CADE’s technicians so that the end of this process has a beneficial design for the Brazilian consumer,” he said.

Nominated for the position of councilor at the autarchy, Victor Oliveira Fernandes holds a doctorate in Law from USP (University of São Paulo), a professor at the IDP and served as chief of staff to Minister Gilmar Mendes, of the STF (Supreme Federal Court).

Asked about the “predatory competition” of marketplaces of foreign origin, he said that the entire world lives a “dilemma about the appropriate level of antitrust intervention in digital markets”, noting that the council has “all the necessary tools” to curb abuses.

However, Oliveira Fernandes considered that the analysis has to be done cautiously, assessing the propensity to innovate and protecting consumers in terms of prices and supply levels in these markets.

The appointed superintendent-general of CADE added: “Cade has effectively some open processes on what we can call the digital market. CADE will provide an adequate response to the cases that are under analysis.”