The technical staff are what actually run the institution
Three years after Brazil granted its Central Bank operational independence, a new constitutional amendment quietly advances through the Senate that would extend that autonomy into the financial realm — allowing the institution to set its own budget, hire its own staff, and fund itself through seigniorage, as central banks in the United States and Canada already do. The proposal, carrying 42 of 81 Senate signatures, arrives not as a solution to a crisis but as a philosophical question: how much independence should a public institution hold, and what obligations does it owe to the workers and citizens it serves? Economists and labor unions alike urge patience, warning that a reform of this magnitude — one that could reshape the relationship between the state, its workers, and its money — deserves more than a rushed legislative season to find its answers.
- A constitutional amendment introduced in November 2023 would transform Brazil's Central Bank from a Treasury-dependent agency into a self-financing public company, a shift that goes far beyond the operational independence granted just three years ago.
- Central Bank employees have been in a work-to-rule action since July 2023, and their union warns the proposal could strip civil servants of the constitutional job protections that allow them to conduct financial oversight without fear of political retaliation.
- The institution has already lost 40% of its workforce over the past decade — shrinking from 5,000 to 3,000 employees — raising urgent questions about whether financial autonomy would stabilize or further destabilize the people who actually run it.
- Economists flag a critical gap in the proposal: it does not clarify how profits and losses would flow between the Central Bank and the Treasury, risking a structure where the institution keeps gains while the public absorbs deficits.
- The government has not officially endorsed the amendment, and with tax reform implementation and capital market development competing for legislative attention, analysts believe the proposal is unlikely to advance without explicit backing from President Lula's administration.
Three years after Brazil's Congress granted the Central Bank operational independence, a new constitutional amendment is moving through the Senate that would take that autonomy considerably further. Introduced in November 2023 by Senator Vanderlan Cardoso and carrying 42 of 81 Senate signatures, the proposal would transform the institution from a federal agency funded by the Treasury into a public company that finances itself through seigniorage — the revenue generated from controlling the money supply, a model used by central banks in the United States, Canada, and Australia.
Legal experts see a certain logic to the extension. The Central Bank currently employs around 3,000 people — down from 5,000 a decade ago — and operates under resource constraints that can slow its work. Financial autonomy, proponents argue, would allow the institution to hire, set salaries, and plan investments on its own terms, free from Treasury delays.
But the proposal has drawn sharp resistance from the workers it would most directly affect. The National Union of Central Bank Employees, whose members have been in a work-to-rule action since July 2023 over pay disputes, warns that converting civil servants into private-sector-style workers would erode the job security that allows staff to conduct bank inspections and financial oversight without fear of retaliation. Economist Carla Beni of the Getulio Vargas Foundation echoes the concern: the technical stability of career employees is not incidental to the Central Bank's independence — it is foundational to it.
Other economists question whether the amendment addresses a real problem at all. Public finance specialist Benito Salomão notes the institution faces no current financing crisis and has recently opened recruitment drives. More troubling, he argues, is what the proposal leaves unresolved: the amendment does not clarify how profits and losses would flow between the Central Bank and the Treasury, raising the specter of a structure where the institution captures gains while the public absorbs losses — and where financial autonomy becomes a door for private interests to enter.
The government itself has offered no official position. The minister of public administration acknowledged in early February that the executive branch was caught off guard by the proposal and is still studying it. Without backing from President Lula's administration, analysts believe the amendment has little chance of clearing the full Senate — particularly as tax reform implementation and capital market development crowd the legislative calendar. The original operational autonomy law took nearly two decades to pass. Economists who support central bank independence in principle are urging the same patience here: this proposal, they warn, raises too many unanswered questions to be rushed.
Three years after Brazil's Congress granted the Central Bank operational independence, a new constitutional amendment is quietly moving through the Senate that would take that autonomy much further—giving the institution complete control over its own finances, hiring, and payroll. The proposal, introduced in November 2023 by Senator Vanderlan Cardoso and already carrying 42 signatures among the 81 senators, would transform the Central Bank from a federal agency dependent on Treasury funding into a public company that finances itself through seigniorage—the revenue generated from controlling the money supply, a model used by central banks in the United States, Canada, Sweden, Norway, and Australia.
On the surface, the amendment sounds like a natural extension of the 2021 autonomy law that separated monetary policy decisions from political pressure. Under that earlier reform, the Central Bank president's term no longer aligns with the president's, beginning instead on the first business day of the third year of each administration. The new proposal would give the institution the financial freedom to hire staff, set salaries, and plan investments without waiting for Treasury approvals or worrying about budget delays. Legal experts like Mareska Tiveron, a banking law specialist, see the logic: the Central Bank currently has about 3,000 employees—down from 5,000 a decade ago—and operates under constant resource constraints that can slow its work. With financial autonomy, she argues, the institution could manage its own affairs according to its own priorities and obligations, much like other independent agencies do.
But the proposal has triggered sharp resistance from the very workers it might affect. The National Union of Central Bank Employees, representing staff who have been in a work-to-rule action since July 2023 demanding better pay, warns that the amendment poses "enormous risks" to both the institution's independence and to workers themselves. The union's concern cuts to something deeper than salary disputes: they fear that converting Central Bank employees from constitutionally protected civil servants into private-sector-style workers would strip away the job security that allows them to resist external pressure when conducting bank inspections and financial oversight. Carla Beni, an economist at the Getulio Vargas Foundation, shares this worry. The technical staff and career employees are what actually run the Central Bank, she notes, and their stability serves a purpose. If those workers become subject to performance metrics and dismissal like private-sector employees, the institution loses something essential—the ability of its staff to act independently without fear of retaliation.
Economists also question whether the amendment solves a problem that actually exists. Benito Salomão, a public finance specialist, points out that the Central Bank faces no current financing crisis. The institution recently opened recruitment drives to fill vacant positions, and its salaries are competitive. The real question, he suggests, is whether financial autonomy is actually necessary. More troubling to Salomão is what the amendment leaves unsaid: How will profits and losses flow between the Central Bank and the Treasury going forward? Currently, when the Central Bank runs a surplus, it goes to the Treasury; when it runs a deficit, the Treasury covers it. The amendment doesn't clarify this relationship, creating what economists call a "privatization of benefits and socialization of losses"—a structure where the institution keeps gains but the public absorbs losses. There is also the risk of regulatory capture, where financial autonomy becomes a pathway for private interests to influence the Central Bank's decisions.
The government itself has not taken an official position. In early February, the minister of public administration acknowledged that the executive branch was caught off guard by the proposal and is still studying its implications. President Lula and Finance Minister Fernando Haddad have said nothing publicly, though Central Bank President Roberto Campos Neto is known to support it. That silence may be decisive. Analysts believe the amendment has little chance of passing the full Senate without explicit government backing, and even with support, it faces stiff competition from other fiscal priorities—particularly the implementation of the tax reform and microeconomic measures to develop Brazil's capital markets. The economic team's calendar is already full.
What began as a technical proposal to extend institutional independence has become a flashpoint for deeper questions about how much autonomy a central bank should have, and at what cost to its workforce. The amendment carries 42 Senate signatures and the support of the Central Bank's own president, yet it may stall precisely because it raises too many unanswered questions. Economists who support central bank independence in principle are urging caution: the original operational autonomy law took nearly two decades to pass. This one, they warn, deserves more time to mature before Congress votes.
Citações Notáveis
The Central Bank would have more freedom to make investment decisions and wouldn't depend on the Treasury for hiring or salary decisions— Mareska Tiveron, banking law specialist
If you convert career civil servants into private-sector-style workers subject to performance metrics, the institution loses the ability of its staff to act independently without fear of retaliation— Carla Beni, economist at Getulio Vargas Foundation
The Central Bank faces no current financing crisis, and we risk creating a structure where autonomy means privatizing benefits while socializing losses— Benito Salomão, public finance specialist
A Conversa do Hearth Outra perspectiva sobre a história
Why would a central bank need financial independence if it's already operationally independent?
Because operational independence—controlling interest rates and monetary policy—is different from financial independence. Right now, the Central Bank still depends on the Treasury for its budget. If it wants to hire someone or give a raise, it has to ask. Financial autonomy means it funds itself and makes those decisions alone.
And that's a problem because?
It's not necessarily a problem in theory. But the Central Bank has already shrunk from 5,000 employees to 3,000. Workers are exhausted. The union fears that if the Central Bank becomes a public company instead of a civil service institution, those remaining employees lose the job protections that let them do their work without political pressure.
So the worry is that independence could actually make the institution weaker?
Exactly. The technical staff are what make the Central Bank function. If you turn them into private-sector workers who can be fired for results, you lose something—the ability of those people to resist pressure from politicians or business interests when they're doing inspections or setting policy.
Does the Central Bank actually need more money right now?
That's the thing. Economists say no. The institution is hiring, salaries are good, there's no visible funding crisis. So the question becomes: why rush this? What problem are we solving?
What happens to the money the Central Bank makes?
That's the real gap in the proposal. Right now, profits go to the Treasury and losses are covered by the Treasury. The amendment doesn't say how that changes. You could end up with a situation where the Central Bank keeps its gains but the public absorbs its losses.
Will it pass?
Unlikely without the government's open support, and the government hasn't given it. There are other priorities—tax reform, capital markets development. And most economists think this needs more time to be debated properly. The original autonomy law took twenty years.