Transferring Fund Oversight to Brazil’s Central Bank Is ‘Total Nonsense,’ Says Former Director

• Why Is the Proposal to Transfer Fund Oversight to the BC Controversial?
• Could the BC Handle Fund Supervision Without More Resources?
• Is Brazil’s Regulatory Model the Real Problem?
• What’s the Risk of Expanding the BC’s Regulatory Role?
• Are Political Agendas Driving This Proposal?
• Could This Lead to Full CVM-BC Mergers?
• What’s the Path Forward for Brazil’s Financial Regulation?
• FAQs

Tony Volpon, a former director of Brazil’s Central Bank (BC), has slammed the proposal to shift investment fund supervision from the Securities and Exchange Commission (CVM) to the BC, calling it "total nonsense." He argues that without budgetary autonomy, the BC lacks the resources to handle this complex task. Volpon suggests the MOVE might be a distraction from the CVM’s failures. The debate highlights deeper issues in Brazil’s regulatory framework and raises questions about the BC’s capacity to absorb new responsibilities.

Why Is the Proposal to Transfer Fund Oversight to the BC Controversial?

Tony Volpon, an economist and former BC director, doesn’t mince words: shifting investment fund supervision from the CVM to the BC is "total nonsense." His critique centers on the BC’s lack of financial autonomy, which he says WOULD cripple its ability to manage this added responsibility. "If the BC can’t even retain talent due to budget constraints, how will it handle fund oversight?" he asks. The proposal, he argues, feels more like a political smokescreen than a real solution.

Could the BC Handle Fund Supervision Without More Resources?

Volpon points out that the BC’s current struggles with staffing and funding make this proposal unrealistic. "The government opposes BC autonomy, yet expects it to take on more work—it’s contradictory," he says. Without a budget increase or flexibility to hire, the BC would likely falter, mirroring the CVM’s current shortcomings. For context, the BC lost 15% of its senior staff to private sector roles in 2025 alone, per internal reports.

Is Brazil’s Regulatory Model the Real Problem?

Volpon notes that both centralized (European) and split (U.S.-style) regulatory models can work—if properly resourced. "The issue isn’t the structure; it’s execution," he says. Brazil’s hybrid system mirrors the U.S., where the SEC independently oversees markets. But unlike the SEC, the CVM has faced criticism for delayed investigations, such as the 2024 Reag fund scandal. "If the CVM is failing, why not fix it instead of overloading the BC?" Volpon asks.

What’s the Risk of Expanding the BC’s Regulatory Role?

Expanding the BC’s duties without addressing its constraints could backfire. "You’d create a bureaucratic monster," warns Volpon. The BC already manages monetary policy, banking supervision, and inflation targeting. Adding fund oversight—a data-intensive task—without dissolving the CVM would stretch it thinner. "Either merge the agencies properly or leave the CVM’s functions intact," he argues.

Are Political Agendas Driving This Proposal?

Volpon suspects the move is less about efficiency and more about optics. "After the Banco Master collapse, everyone wants a scapegoat," he says. Instead of knee-jerk reforms, he urges a transparent audit of the CVM’s staffing and processes. "Bad appointments, not structure, caused recent failures," he adds, citing unnamed political appointees with scant regulatory experience.

Could This Lead to Full CVM-BC Mergers?

"If funds move to the BC, why not everything?" Volpon muses. He warns against piecemeal changes, noting that half-measures could destabilize both agencies. A full merger would require legal overhauls and budget reallocations—something the current administration seems unwilling to tackle. "Until then, this is just rearranging deck chairs," he quips.

What’s the Path Forward for Brazil’s Financial Regulation?

Volpon advocates for a public debate on regulatory priorities. "First, define what ‘good supervision’ means," he says. Next, either empower the CVM with funding and merit-based hires or merge it fully into the BC—with corresponding resources. "Without that, we’re just pretending to fix things," he concludes.

FAQs

Why does Tony Volpon oppose transferring fund oversight to the BC?

Volpon believes the BC lacks the budgetary autonomy and staffing to handle fund supervision effectively, calling the proposal "total nonsense" without these reforms.

How does Brazil’s regulatory model compare globally?

Brazil uses a split model like the U.S. (SEC for markets, BC for banks), while Europe centralizes oversight. Volpon argues both can work if properly funded.

What’s the biggest risk in expanding the BC’s role?

Overloading the BC without dissolving the CVM could create inefficiencies and regulatory gaps, especially in data-intensive areas like fund oversight.