Abstract

Six possible reasons for government intervention in financial markets are evaluated:
control of the money supply, avoidance of financial crises, credit targeting, contention
of the bank oligopoly, restrictions to foreign capital, and use of exclusive financial agents for
public sector loans and deposits. This evaluation is based on the Brazilian experience, as well
as that of some other countries. A discussion is also included of the controversial question of
the Constitutional limits on interest rates.

JEL Classification: G38