International Financial Crisis and Bank Spread: The Behaviour of the Brazilian Banks

Abstract

In view of the financial crisis that hit the world in 2008, the banking markets of several countries suffered from the effects provoked. This was not different in Brazil, since the local government worked on several fronts in its economic policy. The present article has the aim to describe the behaviour of the country’s largest banks by analysing the indicators of banking spread obtained with the accounting method of structural determinants, between 2005 and 2012. The results pointed to an important counter-cyclical action by the public banks to eliminate the preference for the liquidity adopted by the private banks and to rearrange the sector in terms of volumes operated and reduction of both structural expenses and scale gains. Moreover, it was found that given the crisis scenario, the spread of private banks tended to the percentage adopted by public banks, but after that time the spread resumed growth seen in previous years.
Keywords: Bank spread, Brazilian banking system, Financial crisis, Private banks, Public banks.