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Brazil's Caixa Rules Out FGTS Funds and Submits New Capitalization Plan

01/24/2018 - 11H11

MAELI PRADO
FROM BRASÍLIA

Brazilian bank Caixa has barred the use of FGTS funds (Unemployment Compensation Fund) and submitted a capitalization plan for this year and the next.

Early this month, president Michel Temer sanctioned a law which allows cash injections of up to R$ 15 billion (US$ 4.63 billion) in Caixa. According to analysts, the purpose of such injections is to raise credits in an election year.

Such possibility was rejected on Tuesday (23), at the first board of directors meeting of the financial institution after the approval of their new bylaws.

Instead of FGTS funds, the bank has chosen a plan which involves measures such as capitalization by means of the Federal Treasury in exchange for dividends paid by Caixa, issuance of debts and sale of credit portfolios.

This will allow the bank to be capitalized in order to meet regulatory rules of Basel III, an international agreement which seeks to create a sounder financial system, in 2018 and 2019.

REMOVAL

Caixa's first board of director's meeting after the approval of their new bylaws removed three out of four vice-presidents suspended by Michel Temer last week. One of them was reinstated.

The board has decided to start a selection process for all vice-president positions (a total of 12) with the help of a specialized company.

Translated by ANA BEATRIZ DEMARIA

Read the article in the original language

	Samuel Costa - 26.mai.2015/Folhapress
	Caixa Economica bank branch in São Paulo

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• copy http://www1.folha.uol.com.br/internacional/en/brazil/