Brazil’s Central Bank Has Wound Up 17 Firms This Year

Brazil's central bank has shut down 17 financial companies this year, marking the highest number since 2002. The latest closures, announced on September 3, involved two securities firms, Trustee and Banvox, controlled by former Banco Master partner Maurício Quadrado. The central bank liquidates financial institutions when they are insolvent or pose a risk to the financial system, selling their assets to pay creditors and protect depositors and investors.

However, this does not guarantee that all funds will be recovered. On September 2, the Federal District government filed a request with Brazil's highest court, the Supreme Federal Court (STF), seeking a guarantee for a rescue loan for BRB, the Banco de Brasília. The local government argues that without federal support, the rescue cannot proceed.

The BRB rescue is linked to the broader Banco Master crisis, as the central bank vetoed a planned merger between BRB and Banco Master in September 2025. This filing also asks the court to require the central bank to detail all necessary steps for the operation within five days. The Federal District government is seeking federal backing for BRB's loan, as it cannot secure the funds without federal support.

The outcome of this case is uncertain, and the Supreme Federal Court has not ruled on it. Customers of liquidated firms may face losses, as the central bank appoints a liquidator to manage the process but does not guarantee the recovery of funds. The central bank's actions aim to maintain confidence in the financial system, but the high number of liquidations this year raises concerns about the health of smaller financial institutions.

The previous record for liquidations was set in 2002, when 24 institutions were closed during a period of financial turmoil in Brazil. The central bank has not commented on the overall trend, only acting on individual assessments of each firm's financial health.