"Any thoughtful observer should see that Brazil is one of the most important core economies in the world and we need to get it right. We are deeply committed to Brazil," says Chris Harland, vice-chairman and head of Latin America at Morgan Stanley.
Despite a slowdown in consumer spending in Brazil and a record 650,000 job losses in December, bankers remain optimistic about Latin America’s biggest economy. Brazil’s predominantly locally owned banks are mostly solvent, with a capital adequacy ratio of about 14%, above its Basle benchmark of 11%. In addition, quick government action, including that taken by state development bank BNDES, has helped inject liquidity into the financial system. Policymakers are still confident that the economy will grow this year at a rate of between 0.8% and 2%, despite the deepening global recession.
Outstanding candidates
Deutsche Bank and HSBC are also confident about Brazil and plan to put their money where their mouth is by making new local hires. "We believe this is a very good time to be speaking to people who we could add to our growing platform in Brazil – we are seeing some outstanding candidates," says Stephen Cunningham, head of corporate finance and M&A for Latin America at Deutsche Bank.