Brazil

Law No. 4,595/1964, popularly called the Brazilian Banking Reform Law, is the base law that laid out the foundation of the Brazilian Financial System (SFN), which has a centralized monetary authority and a very strict regulatory framework for banking and credit organizations. The law became effective in December 1964 and created the National Monetary Council (CMN) as the supreme governing body and the Central Bank of Brazil (BCB) as the main supervisory body with the power of issuing licenses of operation, inspecting the financial network, and exercising the banking monopoly. In its modern version, the BCB has a powerful set of administrative sanctions, such as imposing a fine up to R$ 2 billion or the extrajudicial dissolution of the non-conformity entities, while the unlicensed banking activity receives a criminal penalty with imprisonment of up to four years. Currently, this law works in coordination with new central bank autonomy laws as the ultimate regulatory framework for digital banks, open finance, and credit-providing fintechs.