Circular No. 1470 — Lowers complementary norms to Resolution No. 1,559/1988 regarding the risk diversification limit per client for financial institutions in active operations

CIRCULAR NO. 001470

We communicate that the Board of Directors of the Central Bank of Brazil, in a meeting held on 11.04.89, in view of the provisions of items I and X of Resolution No. 1,559, of 22.12.88, decided:

a) The active operations and provision of guarantees considered for the purpose of calculating the limit referred to in the aforementioned Resolution are as follows:

• interbank transfers;

• credit operations;

• assigned credits with co-obligation;

• mercantile leasing operations;

• credits resulting from honored guarantees and sureties;

• exchange operations;

• credits in liquidation linked to the above operations; and

• co-obligations assumed in provided guarantees;

b) Consider "client" any person, natural or legal, or group of persons acting individually or jointly or representing a common economic interest. In the case of the public sector, this is defined as the Union, the State, and the Municipality, each together with its directly or indirectly linked entities (public companies, mixed-economy societies, autarchies, and foundations);

c) Clarify that the prohibition on carrying out new operations by institutions that are eventually out of compliance, established in item XI of the aforementioned Resolution, refers to the contracting of new operations with the clients holding the exceeded positions.

2. For the purpose of verifying compliance with the limits in question, only mercantile leasing operations will be computed without the deduction of their respective income accounts to be appropriated.

3. This Circular will enter into force on the date of its publication.

Brasília-DF, April 12, 1989

Keyler Carvalho Rocha Wadico Waldir Bucchi Director Director

José Tupy Caldas de Moura
Director