Brazil’s Iron Lady Resigns as Head of BNDES Development Bank

Maria Silvia Bastos resigned as the head of Brazil’s state development bank BNDES amid a corruption scandal engulfing both the institution and President Michel Temer.

Photographer: Dado Galdieri/Bloomberg

The BNDES in a statement cited personal reasons for Bastos’ decision, without elaborating. Brazil’s currency and the Ibovespa stock index trimmed gains.

Her resignation is a setback to Temer, who is embroiled in a corruption scandal that has undermined his ability to pass reforms aimed at restoring public finances. The scandal involves the world’s largest meatpacker, JBS SA, which for years benefited from BNDES financial support given before Bastos’ tenure, and that is now under investigation by police.

Bastos, dubbed “Iron Lady” by local media for her previous job heading a steel company, has faced criticism for allegedly holding back loan disbursements in general. She had been tasked with overhauling the state bank that, during her predecessor’s tenure, ballooned in size and came to disburse more funds than the World Bank. 

To read more about Bastos’ efforts to reshape the bank, click here

Bastos took over in May, 2016, and lending by the BNDES dropped 28 percent in the 12 months through April. The bank has attributed the drawdown to Brazil’s two-year recession.

Bastos’ departure is a concern for Temer because she was viewed as a crucial member of his economic team, said Sergio Lazzarini, a professor at the Insper business school in Sao Paulo and co-author of “Reinventing State Capitalism” that focuses on BNDES’ role. “When you start losing that technical team, it’s very bad. For Brazil, what would be ideal to navigate this political crisis would be technical stability.”

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She was one of Temer’s only female appointees and the highest ranking. Until Temer selects a replacement, bank director Ricardo Ramos will assume the presidency of the bank. Temer thanked Bastos for her service in a separate statement.