| SAO PAULO
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.