Balancing
Prudential Regulation and Competition
in Banking
Evidence from Brazil
OECD - Paris
December 5, 2025
Background and disclosure
Fernanda Garibaldi is a lawyer, law professor, and currently the Executive Director of Zetta, a Brazilian association of fintechs and digital banks.
The views she will express reflect both Zetta’s institutional perspective and her own professional expertise as a lawyer and PhD specializing in competition in the financial sector.
Lawyer and Law Professor LLM and PhD - São Paulo University (USP)
Who is Zetta?
One step back
● The Brazilian antitrust authority (CADE) and the Brazilian Central Bank (BCB) share complementary responsibilities regarding competition in the financial sector.
● This relationship is established by Law 4,595/64, Law 12,865/2013, and MoU No. 1/2018.
● Law 4,595/64 created the legal framework for the National Financial System (SFN), its bodies (National Monetary Council - CMN, BCB), and Financial Institutions (FI).
● Law 12,865/2013 (Brazilian Payment Law) established the legal framework for Payment Institutions (PI) in Brazil:
○ Created new types of entities: Payment Institutions and Payment Scheme Arrangements
○ Established CMN and BCB as regulators
One step back
● The vast majority of fintechs in Brazil are PIs (~70% of the market).
● Since the enactment of the Payment Law, empirical evidence from the regulator shows:
○ Increased market competition
○ Reduced concentration
○ Accelerated innovation across the financial market (not only in payments)
● Fintechs and digital wallets fueled market expansion and paved the way for the adoption of Pix, the instant-payment system created by the BCB.
● New entrants reduced fees, especially regarding digital accounts and credit card fees.
Balancing prudential regulation and competition policies - Evidence from Brasil
● Banking concetration decreased by ~ 10% between 2012 and 2022
● Nearly 50 million Brazilians gained access to banking services between 2012 (119 M) and 2022 (168 M).
● As of 2025, 200 million Brazilians maintain some relationship with the SFN.
● News entrants brought greater transparency, quality and divesifcation of financial services, as well as more user-friendly digital experiences.
Balancing prudential regulation and competition policies - Evidence from Brasil
● Empirical BCB data shows that some major digital banks are among those receiving the fewest consumer complaints in the country (even though they have similar customer numbers to large banks).
● Fintechs expanded acces to credit for the population.
● Improvements in financial literacy (although high indebtedness rates persist).
Why was Brazil so successful in promoting competition in the financial sector?
● Risk-based regulation (less risk, lower regulatory burden)
● Licensing procedures tailored to each type of institution (PIs, FIs, credit fintechs)
● PI only fall within the regulatory perimeter once specific thresholds are met
● In 2022, prudential capital requirements were harmonized for PIs who lead economic groups, similar to banking conglomerates (S1-S5 categories)
● Alignment with global frameworks (Basel Accords)
Current challenges in the brazilian financial sector
● Externalities beyond financial stability risks (microprudential regulation):
○ Combating financial crime organizations, money laundering, fake accounts
○ Fintech failures
○ Data security incidents
● Externalities affecting financial stability (macroprudential regulation):
○ Interconnected markets
○ Cybersecurity threats
○ Potential big banks failures
A shift - Recent measures addopted
by BCB (Sep- Nov/2025)
● Joint Resolution No. 14/2025: Fixed capital replaced by activity-weighted calculation.
● Resolution BCB 517: Introduced new prudential capital requirements and methodology to of assessment.
● Resolution BCB 528: Defined adjustments and a gradual implementation schedule for PI that are not yet regulated to enter the regulatory framework.
● Resolutions: BCB 494, 495, 496, 498: Introduced new mandatory tech governance, monitoring and auditing, especially regarding integration with Open Finance, Pix, and critical core systems.
Main objectives and what it is important to remember
● BCB tried to minimize the regulatory arbitrage between banks and fintechs
● To preserve innovation while increasing prudential discipline
● To lower systemic vulnerability across financial infrastructure
● To converge with global post-Basel models (EU/UK/SG)
● We are seeing an important regulatory shift: a transition from entitybased supervision to activity-based regulation
● Brazil enters a new maturity stage in regulatory development
● But it is also important to stress that prudential regulation is a constantly evolving work that will never be perfectly finished.
● Good financial regulation should always be balanced with other regulatory values for its own efficiency and for the health of the market.
contato@somoszetta.org.br www.somoszetta.org.br
