The trial by the Plenary of the Federal Supreme Court on the inflation adjustment criteria, which the economic stabilization plans applied to savings accounts and now, decades later, may bring about an impact of billions of dollars to the Brazilian financial system, commenced in November 2013, and is still pending. The examination of four extraordinary appeals (REs) and an action against violation of a constitutional fundamental right (ADPF) is yet to be resumed.

The cases involving the REs and the ADPF address the constitutionality of the Cruzado, Bresser, Verão, and Collor I and II plans and compliance with their effects as to the criteria for inflation adjustment on savings accounts investment balances in the 1980s and 1990s.

While the ADPF, filed in February 2009 by the National Financial System Confederation (CONSIF) seeks a declaration that all the decree-laws and laws that introduced the plans are constitutional, the REs under examination by the STF involve individual actions filed by former investors against specific financial institutions. As to the latter, although former investors individually seek to hold banks liable, the decision to be rendered on the merits will be binding upon all lower courts.

The common ground between the ADPF and the REs lies in the fact that all these cases address a single factual and legal matter, hence a joint judgment and an uniform decision on the merits of each one is of the essence. The ADPF is more comprehensive, as it makes a thorough examination of all points detailing the constitutionality of the plans, and gives to the Supreme Court the opportunity to safeguard the application of the constitutional principle of legal certainty on acts performed in compliance with the rule of law that effected the plans.

Should the STF deem the ADPF with grounds, it must set the opinion that the rule on preservation of the consummated legal act and the vested right is not applicable to constitutional norms granting the Federal Administration and the Congress the power-duty to establish the national monetary policy. The opinion that should prevail is that the authority granted by the Federal Constitution cannot be opposed by a pseudo-vested right and an merely alleged consummated legal act establishing an index to measure inflation deemed ideal, at the saver's sole discretion, within any given period. Accordingly, such decision by the Federal Supreme Court should have an equal impact on the fate of REs.

The recognition of the constitutional legitimacy of the Federal Administration and the Congress to issue rules to adjust the Country's monetary policy will prove that it is not possible to hold the banks liable for alleged pecuniary damages based on the argument that the banks applied said inflation adjustment rules on savings balances, in violation of the former investor's vested rights to this or that particular inflation index. STF must take this circumstance into account, as no conduct was expected from the banks other than the one in compliance with the federal legislation on monetary plans.

Backing up this stance expected from STF, it is worth pointing out that the compliance with the legislation on monetary plans is a posture that not only was applied on the banks' acceptance activities (in the form of savings deposits), but also on their on-lending operations (as was the case of real estate financing operations). Therefore, evidently the banks cannot be accused of improper enrichment in view of a theoretical unequal application of the adjustment criteria according to the economic plans rules. Such rules did not cause an economic imbalance to the relationship between

banks and former investors. Instead, they attempted to break the inertial inflation that, in monetary terms, caused monthly distortions to contracts with continued performance.

The theoretical dismissal of the ADPF and REs filed on behalf of the banks could cause the unjust enrichment of former investors, to the detriment of the entire Financial System. In case the inapplicability of the vested right and consummated legal act principles in terms of economic and monetary policy is dismissed, thus allowing former investors to claim from banks the alleged inflation adjustment losses on their savings accounts, then the banks would certainly face unmeasurable financial losses.

In that regards, an assessment by the Central Bank itself (NT BACEN/DIPEC 2009/250) indicated that the cost of any disbursement to former investors could reach nearly R$106 billion, entailing disastrous consequences to the wealth and operational limits of several banks. The Central Bank points out that one third of this amount, that is, R$35.2 billion, would correspond to the amounts specifically ascribed to CEF --- approximately, three times its net worth.

Nevertheless, the Supreme Court may rule out this huge loss to the entire National Financial System by other means, in case it does not declare the constitutionality of all rules on economic plans. The Supreme Court has the prerogative of restricting the effectiveness of its decision to certain circumstances of time and form, as deemed applicable, to protect the same reasons of legal certainty or other reasons of exceptional social interest, as provided in article 10, Law no. 9.882/99.

Hence, it is expected from the Supreme Court the declaration of public interest in this case in order to avoid the serious financial loss that such unreasonable arguments of "retroactive change" in the inflation adjustment could precipitate, which could ultimately even sap the soundness of the economic players and jeopardize their intermediation capacity going forward.

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