Brazil Central Bank Reaffirms No Systemic Risk From Banco Master Liquidation, Flags Rising Cyber Threats

Overview

• Minutes from the Financial Stability Committee published on November 26 state the Master conglomerate represents 0.57% of system assets and 0.55% of deposits, supporting a non-systemic assessment.
• The RAET resolution regime keeps subsidiary Will Financeira operating while negotiations continue to preserve the institution's activity and protect depositors, investors and other creditors.
• Supervised entities are urged to strengthen integrated risk management with robust processes for detecting, responding to and recovering from cyber incidents.
• The committee highlights growing reliance on third-party technology providers and widespread API use without adequate periodic risk review, calling for resilient ecosystems for incident, crisis and fraud management.
• Recent regulatory measures include rules for virtual-asset services, compulsory account closures to curb abuse of pooled accounts, higher capital and equity floors, governance and risk standards for IT service providers, and transaction limits for non-authorized payment players, alongside references to recent attacks at C&M Software, Monbank (R$4.9 million) and Sinqia (about R$710 million).