British Banking in Brazil during the First Republic

Abstract

This paper delves into the workings of British banks in Brazil in order to assess how they affected the development of the domestic Brazilian banking system during the First Republic (1889-1930.) The paper is concerned with the role of British banks within the domestic economy, in contrast to the role of the banks in the global trading network. It assesses five avenues of influence by which British commercial banks had a role in the Brazilian banking system in ways that differed from domestically owned and managed counterpart: providing a model for a “national” banking system, serving as a business model for domestic banks, offering foreign exchange services beyond the constraints imposed on domestic banks, injecting new capital and reserves in periods of crisis, and supporting the expansion of business transactions within Brazil. The paper also documents the decline of British presence during the period and considers the reasons for the decline.