Banks and Falls

Police outside an Ueno Bank branch in Paraguay -- image via news video screenshot

By Urariano Mota

“Folha” Never Fails. I mean, “Folha de São Paulo” never fails in its reactionary stance. In its editorial this Friday, October 6, titled “Isolated, the Central Bank Did What Was Necessary by Halting Interest Rate Cuts,” the newspaper states right in its first paragraph:

“Given the uncertainty caused by the erratic signals sent by the government and the PT since Luiz Inácio Lula da Silva’s reelection, and amid rapidly deteriorating inflation expectations, the Central Bank had no choice but to halt the cycle of interest rate cuts.”

And further on:

“Recent statements by members of the government and the president himself suggest that no significant budgetary adjustments need to be made—which, in practice, amounts to nothing more than window dressing that will do nothing to stem the rise in public debt.

Within the party, there is enthusiasm for “magic solutions” to lower interest rates and, consequently, the National Treasury’s financial burdens.”

There’s no need to go any further in transcribing the editorial, because in short, it boils down to this: any initiative by the Lula administration is bound to fail, because the fight is waged in obedience to the capitalism that sustains the newspaper. But in this Brazilian context, the newspaper—like all major media outlets in Brazil—is more realistic than the king, which is to say, it’s more reactionary than the capitalist press anywhere in the world. Forget all the conservative media outlets with “Times” in their names, for example, the Financial Times, The Economic Times, The New York Times, and even Time magazine, which published an article titled “Lula’s Victory in Brazil Is a Defeat for Trumpism.”

Forget it, but remember: when Brazilian newspapers cover banks, they treat them very well, thank you. For them, defending big business is no problem, because, after all, they have to champion the excellence of their advertisers. We see that there is nothing in the records of Brazilian newspapers—or in Rede Globo’s news programs—against Bradesco or Itaú, for example. And yet, there are many reports of complaints in real life:

“Even with a profit of R$ 13.861 bi for the half-year, Bradesco continues to lay off employees and close branches” (São Paulo Bank Employees Union)

Or here:

“Itaú bank employees denounce an unreasonable increase in quotas and difficulties in meeting targets” (São Paulo Bank Employees Union)

Or reports of robberies not involving guns or knives:

“Itaú acted with ‘extreme bad faith’ by concealing improper charges from customers for 14 years”

“Bradesco is facing a lawsuit over abusive billing practices”

Yes, the news does come out, but only outside the mainstream media. How long will this protection of the banks last? Are they waiting for a major economic crisis, a collective uprising of the people, when they will—at best—report the facts while omitting the causes? Just this week, we saw the spectacular collapse of Banco Ueno in Paraguay. A political and social crisis of unimaginable proportions. The renowned journalist and writer Andrés Colmán Gutiérrez wrote in the newspaper El País:

“At 3:24 a.m. on Tuesday, November 3, the app used by Ueno Bank’s nearly three million customers suddenly went blank. This Paraguayan bank, which had grown rapidly during its three years of existence and managed millions in funds for government agencies, replaced the display with a single message: ‘We cannot show your balance’.

At the same time, the board of the Central Bank of Paraguay issued a serious statement on its social media accounts, announcing that it had decided to initiate the ‘resolution process’ for Banco Ueno—which meant its intervention and liquidation—after detecting ‘a severe shortfall in its solvency ratio, which had fallen below 50 percent’.

The news caused panic and quickly escalated into the biggest political crisis of President Santiago Peña’s administration. Since Tuesday, dozens of people have been gathering at the bank’s headquarters in Asunción and at its 75 branches across the country to try to withdraw their savings. When they arrived, they found the locations closed and guarded by security personnel. There were scenes of cries and sobs of savers who were getting no answers. ‘I need to withdraw money to buy medicine for my son, who is very sick,’ sobbed Susana Morínigo, a hairdresser in San Lorenzo. ‘I need to get money to buy food; otherwise, my children won’t be able to eat,’ complained Jorge Mendieta, a bricklayer in the city of Itauguá.”

Many years ago, João do Caldíssimo, who sold cachaça and bean soup in the Água Fria neighborhood of Recife, came up with a saying that we found strange and laughable. When asked why he didn’t deposit the money from his stall’s sales in a bank, he would reply, “Banks go bankrupt.” Besides being a genius, João was a prophet.

Urariano Mota is a Brazilian writer and journalist, born in Recife on September 29, 1950. He is the author of novels about the horrors of the Brazilian dictatorship, such as “Soledad no Recife” and “Never-Ending Youth”