Government ready to remove powers from Bank of Portugal

Prime Minister António Costa has said it is “very doubtful” that the Bank of Portugal is “properly equipped” with the necessary ‘know how’ on how to run a commercial bank. Thus, once the crisis at Banif – the country’s latest financial embarrassment – has been contained, his government plans to revise “institutional architecture” so that the country isn’t left up a gum-tree next time a national bank starts to wobble.

According to Económico website today, António Costa has spared no criticism of the role of the governor of the Bank of Portugal, Carlos Costa (no relation), in the crisis.

Costa should be used to banks going belly-up by now. Under his control, the country has been assailed by colossal collapses (BPN, BPP, BES). Left Bloc firebrand Catarina Martins yesterday compared him to the Disney character Mr Magoo – a practically-blind old codger who endlessly falls into difficulties because he simply cannot see them.

“There is a problem with the governor of Portugal,” Martins declared in parliament. “It is too much. The hiding of banking irresponsibility is a problem and the governor is the problem of the problem of irresponsibility in the financial system.”
Thus António Costa’s determination to shake things up “within this legislature”, writes Económico.

The plan will involve setting up a special Resolution Authority, taking the BdP out of the equation.

But there is no quick-fix for the immediate problem: Banif, and a looming salvage operation which will no doubt cost the State hundreds of millions. Costa (António) explained that once the “storm had passed” – i.e. once the government’s 60.5% share in the bank has been ‘sold’ to the highest bidder – Portugal “will be able to know what the impact will have on public accounts”.

natasha.donn@algarveresident.com