COMANDATUBA, Brazil, April 19 (Reuters) - Brazil's banking spreads, or the difference between the rate that banks lend funds and the country's benchmark borrowing cost, will only decline once its causes are attacked, the head of the Brazilian banks federation said on Sunday.

The country needs to reduce default rates, high taxes and implement a national database of "good borrowers" that pay on time in a bid to reduce spreads, said Fabio Barbosa, president of the Febraban association of banks.

He also showed skepticism that the government would try to force private banks to lower lending rates by aggressively cutting borrowing costs at Banco do Brasil (BBAS3.SA: Quote, Profile, Research) and other public banks.

"Spreads will fall naturally. What you can't do is think it will happen in a forceful way," Barbosa told journalists, after speaking to business leaders at the Comandatuba island resort in northeastern Brazil.

Central Bank President Henrique Meirelles said in an interview with the Folha de S.Paulo newspaper published Sunday banks were not doing enough to reduce spreads.

Barbosa also denied speculation that financial firms were hoarding cash and investing in government bonds instead of lending to consumers. He said banks would lose money if they did such a thing, because they pay a spread of 102 percent of the Selic, which is now at 11.25 percent, to raise cash, while the majority of government bonds pay a yield near the Selic.

"Brazil is the only large country where credit operations are growing," said Barbosa, who is also the chief executive of Spain's Santander (SAN.MC: Quote, Profile, Research) in Brazil. (Reporting by Aluisio Alves, Writing by Elzio Barreto, editing by Maureen Bavdek)