To sum up, supervision is something that must work based on a regime of verification, analysis and conclusion. It is important to highlight the intensity and deepness of government-owned banks supervision, which brought us the knowledge of their existing problems and the costs involved in their recovery. Significant restructuring has been carried out in federal banks, after deep and comprehensive general consolidated inspections done by the CB. The adjustments that were made aimed at making the government-owned financial institutions sounder, more efficient and more competitive, rendering them apt to meet the same requirements faced by the private financial system. The maintenance of this behavior will reveal the true costs of governmental programs and will avoid recursive expenditures, which could become skeletons (hidden liabilities) in the public accounts. The continuation of reforms is important in other areas of the CB. In the external area, the CB must aim at intensifying transparency and communication with the markets and investors, while seeking to increase flexibility and to simplify the regulations on foreign currency operations, within a process intended to increase the country’s participation in world trade and international financial markets. In the banking area, the restructuring of the Brazilian Payment System improved risk reallocation, and favored a higher efficiency of the system. This is due to the fact that the Central Bank no longer has any role in financing the institutions that did not have the necessary funds for their operations, reducing moral hazard.
Henrique de Campos Meirelles: Inauguration speech Inauguration speech delivered by Mr Henrique de Campos Meirelles, Governor of the Central Bank of Brazil, at the Ministry of Finance in Brasilia on 7 January 2003. *  *  *  I am honored to take up this position that requires permanent and rigorous defense of the currency. In these past elections, society expressed its legitimate wishes. We all want high economic growth, low inflation, a stable exchange rate, high levels of international reserves, a low external deficit, low interest rates, abundant credit, and a fair distribution of income. These are certainly goals of both the government and society at large. The ultimate target of any policy is economic growth and social welfare. Among the several government entities and institutions that seek to fulfill society's wishes and achieve the government's targets, the task assigned to the Central Bank is to maintain a low level of inflation. The outgoing government chose price stability as a priority target, or at least that is what was perceived by society. There were several consequences of this choice, among which we highlight the extraordinary public attention drawn to Central Bank's role. We will work to keep price stability as a centerpiece of the Brazilian economic landscape, and we will work with resoluteness and long term horizons. President Luis Inácio Lula da Silva's government has clearly stated its objectives of economic growth and social inclusion. Many misunderstood this as a precipitously abandonment of monetary discipline and fiscal austerity.