Cynthia Cohen Freue, senior director and sector lead for financial institutions ratings at S&P Global Ratings: “S&P Global Ratings believes that the Brazilian financial system is exposed to the risk that the new administration could attempt to use government-owned banks to boost economic growth, as seen during previous administrations when the state-owned banks’ market share jumped to 56 percent in 2016 from just above 30 percent before 2007. However, we think the implementation of the State-Owned Companies Act has significantly improved Brazilian state-owned banks’ governance–promoting greater transparency in decision-making processes and limiting political appointments for the banks’ executive positions. Moreover, the implementation of Basel III standards and the need to maintain satisfactory capitalization levels could also somewhat limit their extensive use as a policy tool. The government’s fiscal restrictions will likely limit its appetite to inject capital into government-owned banks to compensate for…”