The beginning of this year has been marked by a turmoil in the international financial market. First, with the failure of Silicon Valley Bank in the US followed by the acceleration of the recurrent problems faced by Credit Suisse in Europe.
Earlier in March, a decision was taken to write off the perpetual debt of CS that was accounted as regulatory capital of that institution. This controversial decision created a wave of protest and mistrust by international investors, exposed not only to the debt instruments of the Suisse bank, but who had purchased similar instruments from financial institutions all over the world.
The big question that everybody was asking was: could that also happen with transactions governed by regulations of other countries?
We will try to answer this question in relation to Brazil.
