The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Risk enters Brazilian wealth management

A change in the interest rate environment will require a fundamental shift in mind-set from the clients of Brazil’s private banks – are they ready for it and where should they look for returns?


Private banking clients in Brazil have been spoilt for decades. 

The country’s wealthy have been able to invest in single-product, sovereign-backed, tax-free investments linked to the (typically high) overnight interest rate, with daily liquidity. They have been able to generate very strong real portfolio returns with virtually no market or credit risk. 

That, finally, is changing and, while it will be a benefit for the nation that the state will not be paying out such large returns to Brazil’s wealthy, these investors are facing a new investment characteristic: risk. 

Nominal rates are falling rapidly – expected to hit 6.5% at the end of this cycle, according to Itaú, from 14.25% in August last year – and real rates are expected to fall into low single-digit territory. Those rates may look good to investors in developed markets but terrible to Brazilians, who are accustomed to near double-digit rates. 

We have been here before, albeit briefly. When previous president Dilma Rousseff pressured the central bank to lower the benchmark Selic – the Brazilian central bank’s overnight rate – to 7.25%

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree