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Government “showed concern” over Bank of Portugal’s bond dump

With presidential candidate Henrique Neto telling journalists yesterday that the governor of the Bank of Portugal was “consciously misleading people”, it is at last emerging that the government was not behind the controversial bond dump that has literally ruined scores of ‘small investors’ and received international condemnation.

According to Bloomberg, the Portuguese government “showed its concern” but did not intervene due to the independence of the central bank.

This concern was explained at a meeting in London with investors Pimco and Black Rock – both of whom suffered hundreds of millions of euros in losses over the bond dump, explains Observador website.

But as Neto told journalists in a walk-about in Mirandela yesterday, the role of a bank regulator is to regulate, not to leap in when there are “disgraces”.

The BdP should have “prevented the accident”, not mopped it up, he stressed.

Within 24 hours it emerged that BdP admitted that had it known more about Novo Banco’s losses, it would not have given the bank so many “responsibilities”.

As national media explained last year, total losses at the bank since it emerged from the ashes of BES came to €551 million by September. With new ‘credit impairments and negative adjustments”, these losses now look set to increase even further.

Eduardo Stock da Cunha – the much-lauded ‘white knight of finance’ drafted in to prepare Novo Banco for sale in September 2014 – looks like he may soon be a contender for the title of Mr Magoo, not long ago bestowed on BdP governor Carlos Costa by the leader of the Bloco Esquerda.

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