Brazil’s Federal Audit Court (TCU) is reviewing the Central Bank’s handling of the recent liquidation of Banco Master, which occurred following allegations of a 12.2 billion Real fraud and the arrest of controlling shareholder Daniel Vorcaro [[3]], [[2]]. initial, confidential findings from TCU technical staff suggest the Central Bank acted appropriately in its oversight and examination of the bank, potentially averting further regulatory action. The review, initiated in late 2025, comes as the liquidation of Banco Master continues to draw attention amid concerns about wider systemic risk [[1]].
Preliminary findings from Brazil’s Federal Audit Court (TCU) indicate the Central Bank of Brazil acted appropriately in its investigations related to Banco Master, sources familiar with the matter have revealed. The initial assessment, currently confidential, forms part of a broader review of the bank’s oversight.
The assessment was completed prior to a November 5th order from TCU rapporteur Jhonatan de Jesus, which called for an on-site inspection of the Central Bank. That inspection was subsequently suspended on November 8th, at the Central Bank’s request, pending a decision from the TCU’s full plenary session.
According to reports, the TCU auditors signaled that the Central Bank appeared to have followed proper procedures throughout its handling of Banco Master, ultimately leading to the bank’s liquidation on November 18th. The analysis remains preliminary, however. The existence of the initial assessment was first reported by O Globo.
The TCU’s investigation into the Central Bank’s handling of the Banco Master liquidation began in late 2025. In his initial order initiating the review, Jesus raised concerns about potential undue haste in the Central Bank’s actions and even mentioned the possibility of implementing precautionary measures against the monetary authority.
The preliminary opinion from the technical staff does not support the implementation of those precautionary measures, and would likely reduce the chances of them being adopted, as it suggests the Central Bank acted correctly in the case, according to one source. The liquidation of Banco Master has drawn scrutiny from regulators and observers of the Brazilian financial system, as the failure of even smaller banks can have ripple effects.
