On 4 February 2026, the Law & Development Research Group and the Institute of Development Policy (IOB) organized a lunchtime event with Professor Pedro Mouallem. At this hybrid event, Professor Mouallem presented his paper Powerful yet constrained: Legal foundations of central banking in Brazil across three crises.
Please click here to download the event flyer.
Abstract: The most recent global crises have unsettled economic policy orthodoxy and expanded central bank power worldwide. As their scope of action and policy instruments have grown, central banks have come to occupy a central position in contemporary capitalism. Yet this rise has not curtailed the power of finance, which continues to be privileged by state action. How, then, can one account for the paradoxical figure of a powerful central bank that remains captive to financial interests? This paper addresses this puzzle by examining how actors construct the legal foundations through which central banks build their power. Drawing on a socio-legal approach, it argues that the legal institutions that operationalise new central bank powers are subject to ongoing contestation, imperfections, and contingent change, leaving central banks persistently vulnerable to financial power. The analysis focuses on the Brazilian case and examines three critical junctures: the banking crisis of the 1990s (1994-2002), the impact of the 2008 global financial crisis (2008-2012), and the COVID-19 pandemic (2020-2022). These periods point to distinct institutional solutions to crisis management with divergent political-economic consequences. Through a longitudinal case study based on document analysis and prior interviews, the paper reveals how layered legal reforms simultaneously raised the power of the Central Bank of Brazil and framed long-lasting patterns of interdependence between public and private actors.