Judicial indicators for the credit market in Sao Paulo: definition, methodology and results

By Alexandre S. de Castro, Augusto C. Romeiro and Marco Antônio F. H. Cavalcanti

This technical note presents a novel set of indicators on the conditions of credit markets in Brazil, based on judiciary records obtained from official gazettes published by the state court of Sao Paulo – the Tribunal de Justiça do Estado de São Paulo. These indicators are computed with a relatively short publication lag, of less than ten days from the end of the reference period.

This set of judicial indicators reflects the volume and the economic value of ju­dicial disputes related to delinquency and default on loans as well as breaching of civil contracts: foreclosure of debt instruments, monition actions, evictions and search and seizure in fiduciary liens.

The indicators comprise the majority of credit instruments available in the market, issued both by financial and non-financial creditors. They also include the following case classes: search and seizure in fiduciary liens – typical of credits towards durable goods (mainly motor vehicles); evictions, which result from default on lease agreements; and business reorganizations (analogous to the Chapter 11 in the United States). Overall, this group of judicial claims is closely related to the degree of insolvency of both firms and households.

The construction of a panel of judicial indicators is based on a system developed at IPEA, denominated IPEAJUS. This system identifies judicial cases on oficial gazettes (or other sources), automatically extracts case information on the websites of the courts and codifies non-structured information such as litigant “types” and judicial decisions. The core of the system is a relational, PostGRESQL database, designed to host all the case data that is extracted from the courts.

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