The Federal Government enacted the Central Bank Autonomy Law, designed to enhance institutional stability and policy predictability at the Central Bank of Brazil (BCB). The autonomy measures include non-coinciding mandates for BCB’s president and board of directors, and rules for mandate discontinuation.
The Federal Government, through Complementary Law n. 179/2021, instituted autonomy measures to the Central Bank of Brazil (BCB), aimed at promoting institutional stability and policy predictability. Therefore, those measures seek to improve confidence and economic stability. The autonomy measures include a non-coinciding mandate system for BCB’s president and board of directors, and specific legal dispositions for mid-mandate replacements.
The mandate system for the president and the eight directors at BCB (article 4) is designed to be, as much as possible, non-coinciding with the elected representatives from the Federal Government, by providing groups of appointments along the Federal Administration’s term (two directors per year). The appointment process remains the same (Presidential appointment with Senate approval). For the first mandates, transitory measures are provided in article 8.
The rules for mandate discontinuation (removal) of the BCB president and directors are provided in article 5, concerning four possibilities. Possibility IV allows removal due to insufficient performance, but the removal request must be submitted by the National Monetary Council (CMN) to the President of the Republic and approved by an absolute majority in the Senate.
Furthermore, BCB is no longer formally attached to the Ministry of Economy, assuming special status and authority, as described in article 6. Other dispositions are provided in the law.
The role of BCB within the National Financial System remains the same. As stated in article 1, the BCB’s primary objective is to achieve price stability (controlling inflation) and the secondary objectives are to preserve financial stability, mitigate output fluctuations, and foster full employment.
The law was sanctioned by the Federal Government with two vetoes (available here) and is the result of Complementary Law Project n. 19/2019 from the Senate.
