Central Bank says downgrading by Moody’s is not indication of problems with health of Brazilian banks

The director of Economic Policy at the Central Bank, Carlos Hamilton Araujo, says that the lowering of the risk classification of eight Brazilian banks by Moody’s Investor Service, announced on June 27, was not a sign that there were problems in Brazilian financial institutions.

Araujo noted that the adjustment was a generalized procedure to make the risk rating of banks adequately reflect their relationship to sovereign ratings (that is, the risk rating of the governments of the countries the banks operate in and the bonds of those governments).

“The Moody’s report does not raise any concerns about the health of Brazilian banks,” declared Araujo.