Federal government considers allowing states to issue bonds to alleviate fiscal crises

Brazilian Finance Minister Henrique Meirelles noted on 17 November 2016 the Brazilian Federal Government may allow states to issue bonds to alleviate fiscal crises (Folha de S. Paulo, Valor). In a meeting with foreign investors in New York, Meirelles confirmed the Federal Government would not compromise its fiscal adjustments to help distressed states. However, he offered that the Federal Government is currently studying solutions to aid these states by the end of 2016, of which state bond issuance is a real possibility. On the subject of investor trust, reasonably a concern after Rio de Janeiro, a state currently facing a fiscal crisis, saw the arrest of two former governors in two days on corruption charges, Meirelles noted investors in New York still received the message of state-issued bonds well. Meirelles will meet with President Michel Temer during the week of 21 November 2016 to discuss the subject in more detail.