The Banco de Portugal has been “forceful and intrusive” in monitoring BES | Committee of Inquiry

The director of the supervisory department of the Banco de Portugal, Luís Costa Ferreira, defended this Friday in the parliamentary committee of inquiry against Novo Banco that the supervisory authority had interfered with the BES case and cited court decisions to support it.

Luís Costa Ferreira believed that during the time he was in charge of the supervisory department of the Banco de Portugal – at the time of the facts of the BES decision – the department’s performance was “particularly energetic and assertive, thus enabling the real situation of the non-establishment to discover the financial contribution of the Espírito Santo Group (GES) ”.

“The discovery of this serious situation was not due to the actions of the external auditor,” said Luís Costa Ferreira, adding that Costa Ferreira has classified it as “innovative” by ETRICC 2, an inspection of the bank’s principal “Demanding” exercise , which was carried out in 2013 by the Banco de Portugal to “finally” learn something about the situation of ESI. “I can hardly imagine a more energetic and intrusive exercise by a bank supervisor,” concludes the director of the central bank, recalling that this exercise has not been used by any other regulators.

The choice of the word “energetic” to classify the supervisor was not innocent. On Wednesday, João Costa Pinto, who writes the secret report on the manager’s performance, accused the Banco de Portugal of power outages. Costa Pinto said that “more timely and vigorous action by regulators could have avoided or minimized the problems” that led to the 2014 resolution of BES.

The director of the oversight department not only defended the oversight’s performance based on his information at the time, but also cited part of a court ruling that supports the central bank’s role. According to the Administrative Court of Círculo de Lisboa in the decision on the resolution action of BES cited by the director, the Banco de Portugal acted: “It cannot even be said that the Banco de Portugal has not taken a stance on diligence and vigilance to be S “. And he adds a new passage of the judgment:” The Banco de Portugal could not be obliged under the regulation to act differently than before. “Costa Ferreira also defended that the responsibility for the financial collapse of BES” with his Managers lies “.

Costa Ferreira also said that he “has no guidance on how to, on the contrary, reduce the assertiveness regarding BES”.

On Wednesday, João Costa Pinto pointed out the existence of an internal note from the supervisory authority, “with the exception of an error in 2011”, in which the difficulties in accompanying the Grupo Espírito Santo (GES) “were highlighted due to the complexity of the group structure”. “This note drew attention to the very negative aspects of this fact.” The independent committee that produced the report “never found any indication that, despite the importance of the matter, the note even went to the BdP’s board of directors. Apparently there were no consequences,” he said, adding that the note was “dated Supervisory director would have been handed over to the lieutenant governor, who then supervised the supervision and would have had no consequences ”. As Luís Costa Ferreira said at the beginning of his speech, however, his leadership of the department took place between July 2013 and October 2014, when he had “direct oversight responsibility for this group”.

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