LEGAL INSECURITY AND ITS EFFECTS ON CREDIT RECOVERY AND BANK SPREAD: LESSONS FROM CHILE AND MEXICO FOR BRAZIL

Abstract

This article examines the impact of legal uncertainty in Brazil on credit recovery and banking spreads. Through a comparative analysis of Brazil, Chile, and Mexico, it discusses how judicial inefficiency and a lack of predictability in court decisions increase credit costs in Brazil. The study highlights the judicial reforms implemented in Chile, such as Law 20.720 and its update by Law 21.563, which reduced banking spreads by simplifying credit recovery processes. Based on these experiences, proposals for Brazil are formulated, suggesting the adoption of alternative dispute resolution methods and the acceleration of guarantee enforcement processes. The research was conducted through a literature review and quantitative data analysis, using reliable sources such as the World Bank and CELAG.