Government interference in Brazil’s loan markets could lead to a new credit bubble, analysts warn. They fear cheap lending through state-owned Banco do Brasil could trigger the country’s own sub-prime crisis as other banks are forced to follow suit in order to remain competitive.
“The government has specific objectives in mind,” says Nick Chamie, global head of emerging markets research at RBC Capital Markets. “They have made it quite clear they want to drive consumer loan rates lower, and that troubles me.
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