Brazil's top judge says Master bank scandal is a market issue, not a Supreme Court crisis

Supreme Court minister Gilmar Mendes told Folha de S. Paulo that the Banco Master scandal should be viewed as a systemic problem of Brazil’s financial market, not as a crisis of the judiciary. He said the issue lies “in Faria Lima” – the financial district – and pointed to shortcomings in the Comissão de Valores Mobiliários (CVM) and the Central Bank, while noting that alleged links between ministers Alexandre de Moraes, Dias Toffoli and former banker Daniel Vorcaro are under investigation. Mendes also defended the continuation of the fake‑news inquiry and criticized the proposed ethics code modeled on Germany’s constitutional court.

A separate assessment by the Central Bank, published in its Financial Stability Report, concluded that the extrajudicial liquidation of Banco Master did not create systemic risk. Protection mechanisms of the Fundo Garantidor de Créditos (FGC) were triggered, the impact was estimated at less than 0.5% of the system’s total assets, and the broader financial system remains well‑capitalized and liquid. The report noted a slowdown in credit growth but affirmed confidence in the system’s resilience.