In recent years, the Law of Fiscal Responsibility and the system of inflation goals and exchange-rate fluctuations have allowed Brazil to significantly reduce its risk, aggressively increase its international reserves and obtain its desire level of investment.

The global crisis that began in 2008 has revealed that the long-term sustainability of good fundamentals before the crisis was the critical factor that allowed Brazil to avoid the worst of the crisis and show solid levels of growth in the following years, especially when compared to its peer countries.

Throughout 2011, the international situation worsened significantly due to the strong deterioration of the fiscal framework caused by the imminence of a number of sovereign defaults and an increase in the perception of systemic banking risks, exacerbated by political uncertainties in the Eurozone. These negative events contributed to a lowered revision of global growth expectations from the optimistic projections made at the beginning of the year. In this context, the fact that Brazil is a closed economy by world standards proved to be a shield and a positive factor because it has allowed so far for limited effects on growth and price behavior, particularly when compared to global results.

Data already released shows the deceleration of the Brazilian economy in 2011, but employment levels and income, although reflecting the same trend, still remain at levels adequate enough to sustain a moderate growth of credit, thus boosting consumer spending, especially in classes C and D, whose growth remains robust, reflecting elevated social mobility.

The creation of real estate finance system (Sistema Financeiro Imobiliário or SFI), the regulation of the “patrimônio de afetação" and the possibility of the use of deed of trust as guarantee ("alienação fiduciária") on real estate financing transactions have led to important progress in the last decade. Recent studies indicate that the continuation of incentives for the housing sector should enable an increase in the relationship between real estate credit and GDP from a current level of 4% to over 10%. Additionally, recent policies established by the Brazilian government for the real estate sector have significantly boosted investment in the sector's assets, especially real estate funds. In this environment conducive to the emergence of new business, our operations have continued to grow, with an additional focus on the hotel sector, as seen in the restructuring done by Banco Brascan S/A in the second semester of 2011.