BRAZIL ADOPTS IFRS. The Convergence Process for Financial Institutions. June

Transcription

1 BRAZIL ADOPTS IFRS The Convergence Process for Financial Institutions June

2 Agenda 1. A flavor of Brazil Brazilian Financial System and Capital Markets 3. Central Bank of Brazil 4. The convergence process for banks in Brazil 5. Conclusion 2

3 A flavor of Brazil... 3

4 Inflation - % per month

5 International Trade Exports Imports 5

6 International Reserves and EMBI+ EMBI+ Reserves 6

7 Brazilian Financial System and Capital Markets CMN Ministry of Finance Central Bank CVM Ministry of Planning National Treasury Tax Authority Self regulated organizations: BOVESPA-BM&F e ANBID 7

8 Brazilian Financial System and Capital Markets 3000 Number of Banks and Cooperatives Coop Banks 8

9 Brazilian Financial System and Capital Markets Dec/2007 US$ thousand Assets Equity Net profits Deposits Top 50 FIs % Total 86,30% 77,30% 79,00% 91,90% 9

10 Brazilian Financial System and Capital Markets Bovespa São Paulo Stock Exchange Number of listed companies Market Capitalization - US$ bi Search: Bovespa 10

11 Brazilian Financial System and Capital Markets Bovespa São Paulo Stock Exchange Voluntary Adhesion to Corporate Governance Practices % 14% 15 23% 23% 29 39% 36 34% 39% 34% 47 48% 46% mar/ % 56% 94 57% % 57% 68% 157 Search: Bovespa Market Capitalization (%) Financial Volume (%) 11

12 Central Bank of Brazil Mission To ensure the stability of the currency's purchasing power and the soundness and efficiency of the financial system. 12

13 Central Bank of Brazil 13

14 The convergence process for banks in Brazil Infrastructure do Support IFRS in Brazil I. Commitment and support II. Legal framework and steps forward III.Communication and information IV.Training and development V. Enforcement 14

15 The convergence process for banks in Brazil I - Commitment and Support Government s agenda Central Bank s agenda Basel Committee - Core Principles Comunicado 14259, 2006 Support and contribution of all stakeholders - financial institutions, accountants, auditors, analysts, investors, academia, etc 15

16 Deadlines The convergence process for banks in Brazil Comunicado Convergence Timeline 31 December 2006 Comparison of IFRS and GAAP for banks 30 November 2007 Implementation Strategy 31 December 2010 Publication of banks consolidated financial statements according to IFRS Coordinator of the Convergence Process Brazilian Central Bank - Financial System Regulation and Organization Area - DINOR 16

17 The convergence process for banks in Brazil II - Legal Framework and Steps Forward Revision of Company Law in 2007 CPC - Comitê de Pronunciamentos Contábeis - engagement of all stakeholders Creation of a steering committee for convergence in Brazil profession and regulators Establishment of a convergence action plan 17

18 The convergence process for banks in Brazil III - Communication and Information Timeline of the convergence process Regulation setting process - Central Bank invites public comments on major regulation proposals previously to their approval Discussion with other regulatory agencies Discussion groups with the industry 18

19 The convergence process for banks in Brazil IV - Training and Development Establishment of technical working groups Design of a specific training program in order to improve skills and knowledge within the Central Bank Participation in both national and international forums and discussions 19

20 The convergence process for banks in Brazil IV - Enforcement Assurance - combination of careful preparation, review and approval in order to avoid errors and omissions - safeguard to maintaining confidence and reliability of financial statements Deadline - IFRS Consolidated Financial Statements from 2010 Consistency - consistent application of standards principles based 20

21 Conclusion Challenges and Opportunities Constant updating Adequate training Commitment and responsibility Experience sharing Cost of implementation and benefits Increased transparency and attraction of more investments 21

22 Thank you! Sílvia Marques de Brito e Silva Consultora Banco Central do Brasil Departamento de Normas do Sistema Financeiro denor@bcb.gov.br 22