Brazil to propose secondary market for real estate securities to boost credit


The Brazilian government will propose the launch of a secondary market for real estate securities next week, which would open up space for banks to “clean up” their portfolios and increase lending, Finance Minister Fernando Haddad said on Tuesday.

At an event organized by Bradesco BBI, Haddad said that lenders such as state-run Caixa Economica Federal would be able to sell real estate securities to third parties, who then would trade the securities on the market. These institutions would have to “yield a little” for the measure to thrive, he said, without elaborating.

“If we manage to start this process and at the same time have a more positive macroeconomic environment, with a more civilized interest rate and inflation under control, we believe we can leverage real estate credit in Brazil, which is very low,” he added.

Haddad said last month that a measure for the securitization of real estate credit was among the government’s priorities for this year.

The minister also said on Tuesday that the process of choosing the next governor of the country’s central bank will be smooth, and that President Luiz Inacio Lula da Silva will listen to all parties involved before making a decision.

The term of the current central bank chief, Roberto Campos Neto, comes up at the end of the year, as well as the terms of two other directors.

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