Brazil's major banks will need to submit new recovery plans byyear-end with guidelines on how they'll respond in stressed scenarios, accordingto Murilo Portugal, the head of Brazilian banking federation Febraban, Valor Econômico reported.

"These plans will provide greater predictability, transparencyand security in the adoption of recovery strategies by banks to maintain the normalfunctioning of the financial system under stress situations," Portugal wasquoted as saying at a banking industry event in São Paulo.

The new recovery plans will have to comply set by the country'snational monetary council CMN that incorporate recommendations from the FinancialStability Board to cover the banks' critical functions for the national financialsystem and adopting stress testing scenarios, among other requirements. The deadlinefor financial institutions to adapt their recovery plans to the new requirementswas set for December 2017.

According to Portugal, the Brazilian banking system is solid,well capitalized and provisioned. He reportedly added that the system has sufficientliquidity to meet its short-term obligations as well as those of Basel III capitalrequirements.