Rio, November 25, 2002 (Agência Brasil - ABr) - The president of the Central Bank, Armínio Fraga, said today that the best way to evaluate the good performance of the Brazilian financial system, "which passed the market stress test of the last decade with a score of 10," is to observe the Basel Index, which measures banks' capitalization.

In Brazil the system operates with an adapted capitalization index of 11%, whereas in the most advanced countries it is 8%. Brazilian banks stand at 16.1% - five points above the average. According to Fraga, this means that the banks are more capitalized, healthier, and, therefore, less vulnerable to crises.

Armínio Fraga explained that calculation of the Basel Index is based on criteria of market risk evaluation and reserves in recent years. "For us, it means, at the moment, not only a guarantee that we have the capacity to move ahead during the remaining period of difficulties, but also an opportunity to show that this period of high tension in the financial market was surmounted successfully," the president of the BC added. (DAS)