BENEFIT PLAN 1
Investment Policy | Benefit Plan 1 | PREVI Futuro | Capec
1. Closed Entity of Complementary Social Security:

Caixa de Previdência dos Funcionários do Banco do Brasil - PREVI

2. Fiscal Year:

2007

3. Minutes of the Deliberative Council / Meeting Date:

Minutes 203, Decision No. 2006/164 of 14/DEC/2006

4. Benefit Plan:

Benefit Plan 1

5. Actuarial Target of the Benefit Plan:

INPC Indexer - Interest Rate - 6%

6. AETQ - Technically Qualified Statutory Administrator:

6.1. Fixed Income: Cecília Garcez and José Reinaldo Magalhães

6.2. Variable Income: Cecília Garcez and José Reinaldo Magalhães

6.3. Real Estates: Cecília Garcez and José Reinaldo Magalhães

6.4. Financing: Cecília Garcez and José Ricardo Sasseron

7. Mechanism to Inform the Participants about the Policy:

( X ) Electronic Means

( X ) Printout

8. Chart Summarizing the EFPC Investment Policy, pursuant to the Regulation attached to CMN Resolution No. 3.121/2003

Obs: Allocation Margin proposed for 2007

(*) The sum of the portfolio limits does not correspond to the segment limit as a whole. The full use of the limits of all the portfolios implies, naturally, in the extrapolation of the segment limit. For example, in the Fixed Income segment, the use of the maximum limits of 10% and 4%, in the low credit risk and average/high credit risk portfolios, respectively, would imply in the impossibility of the use of the maximum limit in public bonds, in order to not extrapolate the segment limit.

9. Diversification

(Item III, § 1, Article 7 of the Attached Regulation)

Fixed Income

a) Observe the limits established in article 17, items I to III, of CMN Resolution No.3121/2003.

b) In the specific case of investments in securities issued by and/or under co-obligation with a financial institution or another institution authorized to operate by Banco Central do Brasil (Brazilian Central Bank), in repurchase operations and in savings deposits, also observe the following limits:

15% of the net worth of the issuer, in the case of institutions considered as low credit risk entities - risk class A, in compliance with PREVI methodology.

12% of the net worth of the issuer, in the case of institutions considered as average credit risk entities - risk class B, in compliance with PREVI methodology.

10% of the net worth of the issuer, in the case of institutions considered as average credit risk entities - risk class C, in compliance with PREVI methodology.

Variable Income

a) Observe the limits established in articles 26 and 27 of CMN Resolution No. 3121/2003.

Real Estates

a) Observe the limits established in article 35, items I to III, of CMN Resolution No. 3121/2003.

General Diversification Limits

a) Observe the limits established in articles 48, 49, 50 and 52, of CMN Resolution No. 3121/2003.

10. Management Purposes

(Item II, § 1, Article 7 of the Attached Regulation)

The main purpose of the Investment Policy is to ensure availability of resources for the accomplishment of PREVI mission, namely:

Administer Benefit Plans, with effective management of the resources provided, seeking better solutions to ensure the social security benefits, so as to contribute for the quality of life of the participants and their dependents, aiming to meet their expectations as well as those of the sponsors.

Such objective acquires more importance to the extent that Benefit Plan 1 started its maturity period during 2003, when the contributions became insufficient to cover the social security expenses, and the income from the assets had to be used in order to complement the resources necessary for the payment of the benefits.

Plan 1 reached its maturity exactly in October 2003, since the number of retirees exceeded that of active participants. Taking into account that, according to the current rules of the Plan, there shall no newcomers, the maturity curve tends to speed up until 2019, when it shall reach the maximum negative difference between the volumes of contributions and benefits.

In view of this current situation, and taking into account the period from 2007 to 2012, the purpose was to privilege an investment management able to provide a flow of income necessary for the payment of all benefits.

Furthermore, our asset management purposes presuppose cancellations in Variable Income within the percentage legally requires and contained in our compliance plan forwarded to the Complementary Social Security Department. As far as the Fixed Income segment is concerned, managerial segments were established in order to improve the management efficiency and meet the volume of commitments inherent to the Plan 1 maturity condition.

In the real estate segment, we decided to focus on enterprises that provide more income flows, chiefly as in rent revenues.

We established as our management goal the increase of the volume de resources directed to the loans and financing segment, observing the conditions described in article 43 of CMN Resolution No. 3121/2003.

The perspective of stability that we adopted for our macroeconomic scenario predicts decreasing profitability for Fixed Income and better opportunities for Variable Income investments. Such context, notwithstanding the premises contained in the programmed cancellations, projects an average nominal monthly profitability for the assets of Plan 1, in the period 2007-2012, of approximately 0.96%, sufficient to cover the obligations required by the actuarial liabilities, whose minimum required rate amounts to nearly 0.86% per month.

11. Engagement Criteria - Management of Fixed Income and Variable Income Portfolios

(Item V, § 1, Article 7 of the Attached Regulation)

The criteria for engagement of external managers for the administration of the portfolios of investments in Variable Income are classified as:

a)Qualitative - General data concerning the asset managing company:

Names and brief résumés of shareholders, administrators and analysis team

Customer portfolio

Company experience

PREVI experience with the company

b)Quantitative - Financial data concerning the assets administered by the company:

Total administered assets per type

Administered assets of institutional investors

Administered assets per investment (portfolios and volume)

Profitability of the investments

Considering the specific characteristics of each case, the various elements shall be taken into account so as to identify the manager with the best profile for the administration of the resources. In every engagement, after the survey and consolidation of the data, the process shall be submitted to the Executive Board for deliberation.

12. Person in Charge, Place and Date

Cecília Garcez

Planning Division

Rio de Janeiro, 14 December 2006