Brazil's monetary policy board has implemented new regulations limiting how banks use credit guarantee funds to attract investors and raise liquidity.

These measures aim to prevent financial institutions from using the FGC guarantee as a primary marketing tool to lure deposits. By restricting this practice, regulators intend to increase the overall safety and stability of the national financial system following the Banco Master crisis.

The Conselho Monetário Nacional (CMN), which includes the Finance Minister, Planning Minister, and the President of the Central Bank, coordinated the rules with the Banco Central do Brasil (BCB) [1, 2]. The regulations target the Fundo Garantidor de Créditos (FGC), a private entity that protects depositors if a bank fails.

There are conflicting reports regarding the timeline of these measures. Agência Brasil said the CMN approved the measures in April 2026 [3]. However, Terra said the approval occurred on Thursday, June 23, 2026 [1].

Despite the contradictions in approval dates, G1 said the new rules took effect on June 1, 2026 [2]. The restrictions specifically stop banks from leveraging the FGC guarantee as an attractive feature to capture a higher volume of deposits [2, 3].

Regulators said that the previous ability of banks to use these guarantees for liquidity purposes posed a risk to the system [1, 2]. The move is designed to ensure that banks maintain healthier balance sheets rather than relying on the perceived safety of the guarantee to maintain funding levels [2].

“Regulations limit banks’ ability to use the guarantee of the Fundo Garantidor de Créditos (FGC) as a tool to attract investors.”

This regulatory shift signals a move toward more conservative liquidity management in Brazil. By decoupling deposit attraction from the safety net of the FGC, the CMN is forcing banks to compete on actual financial health and interest rates rather than the security of a government-backed guarantee. This reduces the risk of systemic contagion where unstable banks use the guarantee to hide insolvency while attracting new capital.