Carlos Costa remains in driving seat as Bank of Portugal hands out €5 million in BES “fines”

Against a background of so much controversy that he could be termed the Portuguese banking sector’s equivalent of Houdini, governor of the Bank of Portugal Carlos Costa has secured a further five-year term at the helm of the country’s central bank, days after it handed out fines of around €5 million in the latest chapter of the BES fiasco.

Confirmation that Costa was the best man for the job – according to the ruling PSD/CDS-PP coalition – has been hugely criticised by members of the Opposition, particularly the Socialists which pose the only serious threat to the government in the upcoming elections.

Talking recently to Observador, Socialist leader António Costa came down heavily on what he called the “governmentalisation” of the Bank, as well as the many errors in Portugal’s financial system which did not “foresee” the BES banking disaster in time.

As investors who lost fortunes in the collapse have loudly been affirming for the past year, Costa has not come out of this grim episode smelling of roses. Far from it. Thousands blame him for the worst banking disaster in national memory, and earlier this year a book on his role, entitled Bankster considered Costa to have behaved in an “immoral and illegal way” which should have seen him resign, if not sacked.

But this was far from the government’s agenda on Thursday – and thus Costa is here to stay.

Only a few days before his reappointment was sealed, Costa’s bank accused 15 former BES administrators of “ruinous management” and the dissemination of “false information”, handing out fines totalling €5 million.

A major target in the firing line is former BES boss Ricardo Salgado, who has repeatedly pointed the finger at BdP for causing the collapse. Salgado has since said he will be contesting BdP’s accusations.

As Jornal de Notícias explains, everyone accused now has 30 days in which to do this.

The Wall Street Journal adds that BdP “doesn’t have the power to launch criminal charges” but it “does have the power to withdraw any accusation”.

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