Standard&Poor's bases its ratings on Banco Bradesco S.A. on the company's "very strong" business position, "moderate" capital and earnings, "adequate" risk position, "average" funding, and "adequate" liquidity (as our criteria define them). The 'bbb' anchor draws on our Banking Industry Country Risk Assessment (BICRA) methodology and our view of the economic and industry risk in Brazil, where Bradesco operates. The indicative BICRA for Brazil is group '4', according to our criteria. One of the factors we base the BICRA group on is our evaluation of economic risk. In our opinion, economic improvements and cautious fiscal and monetary policies have added to the flexibility the Brazilian economic authorities have to manage significant external shocks and potential distortions from the
