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Three more Portuguese banks “could be in line for bailouts”, says former Bank of Portugal vice

An apparently off-the-cuff remark by former vice-president of the Bank of Portugal João Salgueiro during an interview with RTP’s Antena 1 has set the nation’s media on fire at the prospect that BCP, Caixa Geral de Depósitos and Novo Banco “could all be in line for bailouts”.

For a country that has just weathered the fourth banking collapse in the last six years, Salgueiro’s warning spread like the proverbial bushfire and quickly resulted in a second interview with TVI in which he stressed his words should not have been taken literally.

What he meant to say, he told the station, was that “all three banks have different problems”.

But the spark that lit bushfire “was intentional”, he stressed.

“There are problems to resolve and we need to resolve them by actively intervening in their solution”, he explained.

“We will be worse off if we are not aware of what is going on. The Portuguese think that it is just poor management – that is a picture that can be very negative”.

And thus began the backtracking on a statement that could have caused a stampede towards the bank counters of yet more Portuguese banks.

What Salgueiro – also a former finance minister and ex-director of the Portuguese Association of Banks – had been trying to explain was the folly of “putting national independence to one side”.

As RTP explained, he is the power behind a new manifesto signed by politicians and economists pushing for the delay of the sale of Novo Banco to 2019.
Salgueiro told interviewer Maria Flor Pedroso that “the problem is sufficiently important. “We don’t have many Portuguese banks left that can be sold for peanuts for goodness knows what kind of opportunism”.

Referring directly to Banif – sold at a bargain-basement price to Spain’s Santander at the end of 2015 – he said the situation should have been “much better explained” – at which point came his remarks about, BCP, CGD and “a more modest bank” which could all end up being “very expensive for Portugal’s taxpayers”.

It was a pithy interview which called the concept of a Banking union “an abortion, a scandal and a disaster”, and which stressed the need for Portugal to be allowed to run its own show without pressure from outside.

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