Central Bank Orders Banco Master Liquidation After PF Operation; CEO Vorcaro Arrested

Overview

• Federal Police actions under Operation Compliance Zero led to the arrest of Daniel Vorcaro and others, after which the Central Bank decreed Banco Master’s extrajudicial liquidation with an expected record payout by the deposit insurance fund FGC.
• The inquiry began when capital increase requests by Banco Master and BRB failed to demonstrate the origin of funds, following rule changes that curtailed sales of FGC‑guaranteed CDBs.
• To raise cash, Banco Master tapped state and municipal pension funds, sold letras financeiras to BRB in volumes that breached counterparty limits, and resold third‑party credit portfolios to BRB.
• Sources linked to the case reported strong indications that multibillion‑real credits acquired by BRB lacked proper backing, contributing to regulatory alarm.
• Central Bank technicians told investigators they faced exceptional lobbying to delay intervention and to approve a BRB purchase, with reporting naming Senator Ciro Nogueira as a key opponent of a proposed CPI that he denies, while accounts also describe internal splits at the regulator and a liquidation decree drafted earlier but executed after the PF action.