SAO PAULO Feb 6 Brazil's government tapped Paulo Rogério Caffarelli, a senior vice president at state-run Banco do Brasil SA, to assume the finance ministry's No. 2 post, two sources with direct knowledge of the situation told Reuters on Wednesday, in a move aimed at shoring up investor confidence in economic policy.
Caffarelli, who is currently the senior vice president in charge of wholesale, private and international banking at Banco do Brasil, accepted the nomination and may start as soon as possible, said the sources, who declined to be identified because of the sensitivity of the issue.
Efforts to contact media officials at the finance ministry in Brasilia were unsuccessful. Banco do Brasil, the country's largest bank by assets, declined to comment.
The ministry's No. 2 post - which helps formulate policies and acts as a bridge between Finance Minister Guido Mantega, lawmakers and investors - had been vacant since June last year, when economist Nelson Barbosa left. Dyogo Henrique de Oliveira, a senior official at the ministry, had occupied the post on an acting basis since then.
Both sources said Caffarelli's appointment aims to help mend relations between government policymakers and investors, who have in recent months lashed at what they see as erratic policy actions. According to one of the sources, Caffarelli, a lawyer who began his career in Banco do Brasil as a trainee, was key behind efforts to lure new investment into infrastructure projects that the government auctioned off last year.
The rapid erosion of Brazil's public finances over the past two years has triggered alarm bells among investors, raising fears of a debt rating downgrade in 2014 that could scare off much-needed investment and undermine a timid recovery in Latin America's largest economy.
Standard and Poor's in June placed Brazil's rating on negative outlook, and Moody's Investors Service reduced its outlook a few months later to stable from positive. One of the most pressing problems that Brazil faces, according to Moody's and peers, is that the nation's total debt is above the median for countries bearing the same debt ratings and investment is too low as a percentage of gross domestic output.
Under Caffarelli, Banco do Brasil's wholesale bank landed more mandates than ever to underwrite billions of dollars in bond and stock offerings, according to Thomson Reuters data. However, his efforts to help build a fully fledged investment bank within Banco do Brasil through a joint venture and to expand overseas partially failed in the wake of high valuations.