Is the Brazilian bond market underdeveloped? What are the main determinants of the current situation of the bond market, and what can be done to promote its development? Although the bond market represents a large proportion of the gross domestic product (GDP) in developed countries, it seems to be underdeveloped in emerging markets. In the particular case of Brazil, it is widely known that firms do not have access to enough credit at a reasonable cost.
The discussion about the level of real interest rates and its causes is an important policy issue that is being dealt with by several Brazilian governments. High real interest rates are often listed as an impediment for greater economic growth and credit availability. We will discuss some of the causes of high real interest rates, list some of the policies that have been implemented to fight high real interest rates, and present economic initiatives that may still be lacking in order to reduce rates even further, resulting in cheaper corporate credit and in the growth in the domestic bond market. It is important to say that government credibility seems to be at the root of high interest rates. A Worker’s Party (PT) administration was seen as potentially fiscally irresponsible and as a possible promoter of debt default during the 2002 election campaign. Brazilian interest rates and sovereign spreads reached record highs in 2002 but, even before the election, the situation improved after the PT’s “Letter to Brazilians” that reassured that none of this would happen,. The Lula administration has so far fulfilled its commitment and Brazil is currently (May 2006) enjoying its lowest real interest rates since the inception of the Real Plan economic stabilization plan in 1994 with the US dollar trading at very low prices. Yet, more is needed to bring interest rates down even more and to acquire the investment grade status. This background discussion is important and will be dealt with in the Brazilian financial sector background in section 2 of this paper.
This paper develops a dynamic model of investment in environmental abatement technology (EAT) and exports with heterogeneous firms. We generally refer to investment in EAT as all actions taken to minimize environmental impacts both in the domestic and export markets. For example, these expenditures include actions taken to reduce waste, certify products which meet foreign environmental standards, improve environmental sustainability practices, and upgrade product characteristics that may a ect the environment both during and after its nal use.
The Office of the Inspector General (OIG) completed a follow up audit to the OIG’s Audit of the Office of Debt Collection Management’s Implementation of the Collection Litigation Automated Support System, Report Number 01-15. In that audit, which was issued on July 3, 2001, we identified discrepancies between civil debt collections reported by the United States Attorneys (USAOs) and the litigating divisions with the Department of Justice (Department) Treasury account deposits for FY 1998 and FY 1999, as reported by the Justice Management Division’s (JMD) Debt Accounting Operations Group (DAOG); and inconsistencies between the fiscal year ending civil debt balance and the subsequent year’s beginning civil debt balance reported by the Executive Office for United States Attorneys (EOUSA) for those fiscal years.
Civil debt that has been established as an amount owed the United States Government may be referred to the Department for collection from other federal agencies, or may originate from litigation at the Department. Civil debt is collected through litigation by the 94 U.S. Attorneys (USAOs) and the 5 litigating divisions within the Department that have authority to collect debts through litigation. Additionally, civil debt may be collected by Private Counsel offices1 within certain judicial districts. The Office of Debt Collection Management (DCM) is the office within JMD that annually reports the status of the Department’s collection efforts. The DCM is responsible for overseeing the collection of debt and developing programs to support the collection of debts by USAOs and the litigating divisions within the Department.
