The rule-making powers of Brazilian Central Bank and of the National Monetary Council: the democratic deficit of financial regulation

Author(s)

Jean Paul Cabral Veiga da Rocha

• Document type: Doctoral Thesis
• Press: São Paulo.
• Institution: Universidade de São Paulo (USP). Faculdade de Direito (FD/SBD)
• Defense date: 2004-11-12

Examining board members

Eros Roberto Grau; Luiz Gonzaga de Mello Belluzzo; Luciano Galvao Coutinho; Paula Andrea Forgioni; Calixto Salomao Filho

• Advisor: Eros Roberto Grau

Abstract

Financial regulation, specially banking regulation, plays a central role in the organization of social life. The current regulatory techniques, highly sophisticated, are the result of decades of evolution. They require well-trained public officials, specific budgets and a complex institutional framework. Moreover, in order to carry on the systemic and prudential regulations, regulators need broad rule-making powers. The assignment of such authority to non-majoritarian bodies is considered by some authors as a sort of anomaly in Constitutional Law. To others, it is seen as a necessary element of the institutional design of the contemporary Regulatory State. This is the stage where the debate about the process of bureaucratization of social life meets the intellectual concern about the current developments of western public law, namely the issue of the separation of powers. The juridification of the social spheres brings the issue of the democratic deficit of bureaucratic policymaking. Since ordinary citizens lack the expertise as well as the material and financial resources which are necessary to monitor the decision-making process, this dissertation develops the normative assumption that judicial review is necessary to ensure the democratic legitimacy of the administrative process. The dissertation analyses that democratic deficit from the viewpoint of the constitutional jurisprudence of the Brazilian Supreme Court (Supremo Tribunal Federal STF) regarding separation of powers, the rule-making authority of Brazilian non-majoritarian bodies and the doctrinal disputes about legislative delegation. The case studies show that the judicial review by STF has in practice rejected the Brazilian public law non-delegation doctrine, but has done it in a way that does not strike a balance between technocratic rationality and the normative claims of deliberative democracy. (AU)