Banco Master’s Liquidity Crisis: Owner Admits Business Model Relied Entirely on Credit Guarantee Fund
Daniel Vorcaro admits Banco Master’s business model was fully dependent on the Credit Guarantee Fund, leading to a liquidity crisis and Central Bank-ordered liquidation in 2025.
- • Banco Master’s business plan was entirely based on the Credit Guarantee Fund (FGC), according to owner Daniel Vorcaro.
- • Vorcaro attributes the bank’s liquidity crisis to regulatory changes affecting the FGC.
- • Central Bank rejected the sale of Banco Master to Bank of Brasília and ordered its liquidation.
- • The FGC is expected to pay about 45 billion reais due to creditor claims related to the bank’s failure.
Key details
Banco Master’s owner, Daniel Vorcaro, confirmed in a Federal Police testimony that the bank’s entire business strategy depended on the Credit Guarantee Fund (FGC), a measure designed to protect depositors and investors in the event of financial trouble.
Vorcaro stated, "The business plan of Banco Master was 100% based on the FGC and there was nothing wrong with that, it was the rule of the game." He admitted the bank faced a severe liquidity crisis, which he attributed to regulatory changes that altered the conditions of FGC coverage, impacting the bank’s capital capabilities. According to Vorcaro, these regulatory shifts came after the bank had started to grow, making the continued reliance on the FGC unsustainable.
He also described how Banco Master’s attempted sale to the Bank of Brasília (BRB) took place "technically within the Central Bank," but the Central Bank rejected this sale. Subsequently, the Central Bank ordered the extrajudicial liquidation of Banco Master amid investigations into the bank’s operations and management of securities.
As a consequence of the bank’s failure, the FGC is expected to cover around 45 billion reais in creditor claims. Vorcaro highlighted that the crisis resulted in losses impacting the entire financial system, not just Banco Master.
Vorcaro was arrested on November 17, 2025, at São Paulo’s Guarulhos International Airport while attempting to travel to Dubai for business reasons. He was held for 12 days and remains under judicial restrictions, including electronic monitoring. He argued that negative media coverage, possibly influenced by competitors, exacerbated the bank’s reputation issues following regulatory modifications.
The case underscores the risks associated with business models fully reliant on regulatory safety nets like the FGC and the consequences of sudden regulatory changes on such financial institutions. The Central Bank’s intervention and liquidation mark a significant step in addressing the crisis and safeguarding the broader financial system in Brazil.
This article was translated and synthesized from Brazilian sources, providing English-speaking readers with local perspectives.
Source articles (2)
Source comparison
Vorcaro's detention duration
Sources report different durations of Vorcaro's detention.
cnnbrasil.com.br
"Vorcaro was arrested and taken to a cell at the PF’s superintendence."
cartacapital.com.br
"Vorcaro was detained for 12 days during the initial phase of the Operation Compliance Zero."
Why this matters: One source states Vorcaro was detained for 12 days, while the other does not specify a duration. This discrepancy affects the understanding of the timeline of events following his arrest.