Brazil removes deposit guarantee for investment funds
BRASILIA Feb 25 (Reuters) - The Brazilian government on Thursday removed a state-backed guarantee on savings deposited in moderately risky investment funds, in an effort to differentiate small savers from qualified investors.
The National Monetary Council, the country's highest economic policy body, known as CMN, said it decided to remove that deposit guarantee, which is triggered in the event a fund goes bankrupt or faces liquidity problems.
The guarantee provided by the Credit Guarantee Fund, known as FGC, covered up to 250,000 reais ($63,219) in deposits in pension and investment funds.
Central bank official Jose Reynaldo Furlani said the decision aimed to comply with a request from the FGC, which said those funds should be considered qualified investments and therefore not benefit from the guarantee.
"The Fund was created to give guarantees to small investors, small depositors," Furlani said. ($1 = 3.9545 Brazilian reais) (Reporting by Marcela Ayres; Writing by Alonso Soto; Editing by Matthew Lewis)
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