Brazil seen raising Selic rate 25 bps to 12.5 pct
15 de julho de 2011Brazil president to reduce ethanol mix to fight inflation
19 de julho de 2011There was quite a debate here on beyondbrics last week about whether or not Brazil has got itself into a credit bubble. On balance, the consensus was that the banking system isn’t heading into a crisis, but consumers are overstretched – and that this is a real threat to growth.
It looks as though investors agree. After the break is a chart showing the performance of Itaú Unibanco’s shares over the past year.
As you can see, they’re at a new 12-month low. Other bank shares tell the same story. For example Bradesco is also at a 12-month low.
One analyst described this as “an indicator of stress within the banking system due to excess consumer leverage in Brazil, a negative for growth and being totally ignored by local inflation hawks…”
