Banca de DEFESA: JOYCE ASSIS DE OLIVEIRA

Regional Aspects of Credit in Brazil (2004 – 2020): Credit Impulse and Banking Behavior from the Perspective of Liquidity Preference

Regional credit, credit impulse, bank liquidity preference (BLP), regional inequality.

This dissertation analyzes the regional aspects of credit in Brazil between 2004 and 2020, examining how banking behavior and credit dynamics influence economic growth across the country's five major regions (Norte, Nordeste, Centro Oeste, Sudeste e Sul). In particular, it investigates the extent to which regional economic and social heterogeneities shape the responses of local financial systems. Two complementary methodologies were adopted: the calculation of Credit Impulse, defined as the variation in regional credit flow relative to regional GDP, and the construction of the Bank Liquidity Preference (BLP) indicator, estimated by the ratio between the credit growth rate of the country’s five main banks (Banco do Brasil, Caixa Econômica Federal, Bradesco, Itaú Unibanco, and Santander) and the annual variation in regional GDP. The results show that more economically dynamic regions are more sensitive to credit fluctuations, with sharp expansions during growth periods and deeper contractions during crises. Moreover, private banks were found to exhibit higher risk aversion—especially in less developed regions—by increasing their BLP and restricting credit supply. In contrast, public banks adopted a countercyclical approach, maintaining low BLP and supporting credit expansion in times of recession. Thus, this dissertation contributes to understanding how credit dynamics, together with banking behavior through the lens of liquidity preference, tend to reinforce regional disparities. The findings provide empirical evidence that can inform public policies aimed at reducing territorial inequalities by decentralizing the financial system and promoting targeted credit allocation.