Knives back out for governor of Bank of Portugal

Knives are once again out, and sharpening, over the continued future of Carlos Costa in his capacity of governor of the Bank of Portugal.

Likened by left-wingers back at the height of the third crippling banking scandal to rock his tenure to ‘Mr Magoo’ – the myopic accident-prone Disney character – he is now being ‘circled’ by the centre-right as well (click here).

Said reports on Monday, the CDS has “not ruled out” supporting the latest Bloco de Esquerda call for his dismissal on the basis that “there really is no-one in Portugal who can vouch for his suitability”.

This latest round in the ongoing political war that has been raging over Costa and his fairly abysmal record while in charge of the country’s central bank comes after he announced that he has asked to be excused from ‘deliberations’ over the damning Ernst & Young report on ‘ruinous management’ at State Bank Caixa Geral de Depósitos during years in which he was one of the bank’s directors.

According to reports in Sábado and Jornal Económico, during these years “he will have participated in the approval of some of the ‘ruinous loans’ to large creditors”, resulting in losses that topped €1 billion.

But Costa stresses his responsibilities were in fact “in the areas of marketing and international” banking, and that as such he should be under no threat of any blame for alleged mismanagement whatsoever.

A note published on the central bank’s site on Monday added that Costa remains “totally available, as always” to respond to any questions that may come from parliament. These now are stacking up with a sense of urgency.

Centre-right PSD whose former leader Pedro Passos Coelho actually ‘chose’ Costa for his role, have to date poo-pooed the Bloco de Esquerda attack as “disproportionate”, but at the same time the party concedes that Costa needs to be heard in parliament “rapidly” albeit “tranquily”.

Political journalist David Dinis believes this latest spat is much more about who will actually succeed Costa – due to leave his post ‘whatever happens’ next year.

Meantime, the government is said to be ‘moving’ (finally) on changes to the ‘model of financial supervision’ that would affect the way crises like this in future could be handled.

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