Declaring that he had “antipathy” and “resistance” to changes to the IOF (financial operations tax) a day after Finance Minister Fernando Haddad announced the measure and withdrew from part of it, Central Bank President Gabriel Galípolo publicly revealed for the first time a misalignment between them.
The increase in the OIF was greeted like a bomb by investors, who feared an accelerated drain of the country’s resources and interpreted the government measure as an attempt at capital control. The negative repercussions hit Galípolo immediately, and when he acted to remedy the damage, demands were made from both sides behind the scenes.
Three economists, who asked to remain anonymous, highlighted the Leaf The episode marks an important step in the BC leader’s journey to gain market trust and credibility in his first year in office.
According to one of them, Galípolo is much more popular in Faria Lima today than Haddad. Indeed, while the Minister of Finance exhausts his political capital, the President of British Columbia shows that he will support decisions that could contradict the wishes of President Luiz Inácio Lula da Silva (PT) or members of his government.
MASTER BANK
Faria Lima’s support strengthens Galípolo in the most tense episode since he assumed the presidency of British Columbia: the crisis of the main banks. On the 27th, banking and fintech associations gathered to defend the monetary authority.
“The presence of a technical and, above all, independent regulator from an institutional and operational point of view, is one of the most important pillars in building a solid and resilient financial system. The signatory entities recognize that the Central Bank of Brazil played this role,” they said.
The joint note is signed by ABBC (Brazilian Association of Banks), Acrefi (National Association of Credit Institutions), Febraban (Brazilian Federation of Banks) and Zetta (association that represents companies in the financial and payments sector), in a rare alignment of entities with different profiles in the financial market.
The support came at a time when Galípolo was on a collision course with the STF (Federal Supreme Court). Behind the scenes, British Columbia leaders say they have been under attack since Master’s liquidation was decreed in November.
Even if Minister Dias Toffoli denies that the BC was put under investigation, the actions of the regulator are in the crosshairs of the STF by requiring that Daniel Vorcaro, owner of Master, Paulo Henrique Costa, former president of the BRB (Bank of Brasilia), and Ailton de Aquino, director of the Inspection of the BC, are also questioned on this matter.
Toffoli ended up returning, later, to Aquino’s participation in the confrontation carried out at the conclusion of the testimonies. The federal police and the deputy judge who works in the magistrate’s office considered that the presence of the director of BC would not be necessary.
Toffoli’s decision suggests that the minister viewed BC’s decision to liquidate the bank as premature, but, in the view of many investors and bankers, BC was actually too slow to act to stop Vorcaro.
In the midst of the Master affair, Galípolo had meetings with Minister Alexandre de Moraes. Moraes’ family office has a contract with Vorcaro’s bank.
The meetings that the STF Minister admitted to having had with Galípolo were not included in the public agenda of the President of British Columbia, and the note published by the monetary authority was not very convincing. It only says that British Columbia “confirms” having held meetings with Moraes to “address the effects of the application of the Magnitsky Act”, a sanction imposed by the United States on the magistrate. The statement, however, does not deny that the Master’s issue was revealed.
In the final part of the analysis of the Master takeover operation by the BRB, which ended up being rejected by the BC, Galípolo also found himself in the crosshairs of the National Congress. Vorcaro built powerful relationships in Brasilia, maintaining close relationships with politicians in the center, mainly the president of the PP, Senator Ciro Nogueira (PI).
The PP and other central parties launched an offensive in the Chamber of Deputies to approve a bill that would give Congress the power to dismiss members of the BC leadership. The measure found itself blocked and with no prospect of advancement as the investigations against the Master progressed.
In November, after the BC liquidated the bank and Vorcaro was arrested, the PF announced that Master had transferred 12 billion reais to the BRB in a non-existent credit portfolio.
CYBER ATTACKS
The Master crisis occurred alongside movements that raised questions about the security of the financial system. In the middle of the year, the largest cyberattack in the country’s history was recorded, with more than 800 million reais embezzled.
This is not an isolated case that forced Galípolo to adopt emergency measures throughout the second half. To avoid a crisis of public confidence in the system, British Columbia has promoted a series of regulatory changes aimed at closing loopholes used by criminals.
Many of these were affected by disagreements between the board and the technical team, which saw some rush in the face of pressure for a rapid response to the problem.
Certain measures, such as the increase in the minimum capital required of financial institutions, have been received with concern by small institutions, who fear a loss of competitiveness. Under Galípolo, some of the pillars that govern BC’s actions have been rebalanced. The emphasis on innovation, characteristic of the leadership of his predecessor, Roberto Campos Neto, lost steam in 2025.
MONETARY POLICY
The change of direction observed in the field of regulation clashes with the perception that, in the conduct of interest policy, Galípolo’s work was one of continuity.
On January 1, he was elevated to British Columbia’s top job amid mistrust. Due to Lula’s close relationship with Galípolo – whom the chief executive once called the “golden boy” – there were fears that the Palácio do Planalto could influence the monetary authority’s decisions on interest rates. But a year later, the financial market praised Galípolo precisely for remaining free from political pressure.
Rodrigo Maia, director of BTG Pactual and former president of the Chamber of Deputies, considers the current president on a par with the great names that have marked the history of the Central Bank.
“I expected that he would be able to resist the pressure of the President of the Republic. Perhaps thanks to the good relations (with Lula), he was able to show the importance of this independence of the Central Bank. In my opinion, the first year of President Galípolo was spectacular, well above what most people expected,” he said.
Sergio Werlang, former director of the BC and professor of economics at the Brazilian School of Economics and Finance of the Fundação Getulio Vargas (FGV EPGE), gives a positive assessment of Galípolo’s management. However, he says he wouldn’t raise interest rates as much if he were president.
The Copom (Monetary Policy Committee) closed the year 2025 with the base interest rate (Selic) set at 15% per year – the highest level in almost two decades.
“The management of the Central Bank was more conservative than ideal, because it insisted too much on respecting the (inflation) objective of 3%,” he says. For Werlang, Galípolo has shown consistency over time. “He gained his reputation through speaking.”
Keeping interest rates high has become a source of criticism from members of the government, including Haddad and Minister Gleisi Hoffmann (Secretariat for Institutional Relations). The president of British Columbia, however, was spared personal attacks.
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