Transcript of Centeno's hearing for governor of Banco de Portugal occupies 91% COF report

Report on the hearing of Mário Centeno is purely descriptive and does not make any conclusions about the suitability of the former Minister of Finance for the position of governor of Banco de Portugal. Bloco de Esquerda will vote against, as the report “reduces Assembly of the Republic to a secretariat”, guarantees Mariana Mortágua.

José Sena Goulão / Lusa

The report of the hearing at the Budget and Finance Committee (COF) of Mário Centeno for the post of governor of Banco de Portugal (BdP), which took place last Wednesday, was delivered today by João Paulo Correia, deputy of the PS and rapporteur of the document. The transcript of the hearing occupies about 91% of the report, that is, it constitutes 56 of the 61 pages that make up the document, to which are added two annexes - the letter of the Prime Minister, António Costa, to appoint the former Minister of Finance for the position and professional curriculum of Mário Centeno -, which is divided into five parts.

It is, therefore, a mere formality in the process of appointing the Governor of the banking regulator, which, furthermore, results from the legislation currently in force. The Organic Law of BdP provides that "the appointment of the governor is made by resolution of the Council of Ministers, on the proposal of the Minister of Finance and after hearing by the competent committee of the Assembly of the Republic, which must prepare the respective descriptive report".

That is precisely why, in the report, there is no conclusion on the suitability of Mário Centeno to succeed Carlos Costa in the leadership of BdP. And if there were any doubts, it would be enough to reread the conclusion of the report, which only mentions that the Assembly of the Republic held the hearing of Mário Centeno under the terms of the law and that, from this, “this descriptive report was produced, of which the Government will be informed , through the State Secretariat for Parliamentary Affairs ”.

In addition, the change to this methodology of the BdP governor nomination process, still in force and which will apply to Mário Centeno, is part of the bill presented by the PAN that intends to change the rules governing the nomination of the governor and the other members of the BdP board of directors.

In the wording of the article, the PAN proposes that “the governor and the other members of the board of directors are designated by Resolution of the Council of Ministers, on the proposal of the member of the Government responsible for the area of ​​Finance, after a binding, favorable opinion from the competent committee of the Assembly of the Republic on the adequacy of the individual's profile to the functions to be performed ”.

When Carlos Costa was reappointed for a second term at the helm of BdP in 2015, the respective report by the Assembly of the Republic was also “descriptive”, João Paulo Correia explained to Jornal Económico.

Mariana Mortágua of Bloco de Esquerda refers to Jornal Económico that “in the case of BdP the reports are“ minutes ”. It doesn't make any sense and that is why we want to change the law to become binding opinions ”.

A similar criticism was made by Cecília Meirelles, deputy of the CDS.

The deputy of the Bloc even says “this report reduces the Assembly of the Republic to a secretariat”. For these reasons, the Bloc will vote against the Centeno hearing report.

The XNUMXst century Banco de Portugal according to Centeno

Mário Centeno's presentation traces the future of Banco de Portugal for the XNUMXst century and sends some messages and criticisms. In addition to defining its designs for the institution still led by Carlos Costa.

Centeno speaks of the period in which he was Minister of Finance, which “was marked by the assumption of unique responsibilities in areas critical to the economic and financial development of Portugal and Europe”

“This accumulated capital”, he says, “constitutes an unquestionable asset for the exercise of the functions of governor of Banco de Portugal”.

“The country needs as never before strong and renewed institutions and leaders capable of facing these paths with determination, in a competitive European and global context”, says Carlos Costa's successor.

“It is with enormous enthusiasm, but above all with full awareness of the future challenges, that I face the leadership of a central institution for the Republic, such as Banco de Portugal”, he also reads in his speech.

"I know Banco de Portugal well," Centeno told deputies.

For the ex-minister of Finance, Banco de Portugal “should return to being a reference institution in Portugal and in Europe, since it brings together many of the best technicians trained in the best Portuguese universities”, which could be understood as a criticism to the past and your design for the future. In the same sense goes the phrase quoted in the report: “Banco de Portugal must become synonymous with action, to face the countless challenges of the near future. But you must not face them in an ivory tower, but with all Portuguese society ”.

In this context, Centeno believes that Banco de Portugal has four key challenges in its strategic intervention: ensuring efficient and demanding supervision - prudential and behavioral - that accompanies the technological innovation process; participate in the conduct of European monetary policy and in its strategic review; define a macroprudential policy in line with the complex mechanisms of risk transmission in the financial system; and, giving credibility to the resolution mechanism and process, a condition for financial stability.

For Mário Centeno, the central bank “must ensure the stability of the national financial system and has the duty to advise the Government in these areas”.

"This role must be played with a single objective, to contribute to the design of a national strategy, based on active participation in the Eurosystem and a growing proximity to national actors", he adds.

Therefore, for Mário Centeno, “Banco de Portugal, in the XNUMXst century, should continue integrated supervision”. But not only. "It must invest in the development of its digital dimension and in the monitoring of the evolution of the banking and financial business, in a world in which the digital transition assumes enormous preponderance, which today has as its maximum exponents the so-called Fintech and virtual currencies", he said.

Central banks and governments have been devoting increasing attention to regulation and supervision, taking advantage of opportunities, but also preventing the threats of money laundering and terrorist financing., Therefore, “Banco de Portugal in the XNUMXst century must open to the community and justify its financing ”.

Centeno highlights three areas to which he is particularly sensitive and in which the role of Banco de Portugal is irreplaceable: “economic studies and the monitoring of the Portuguese economy; the production of statistical information and the promotion of the national statistical system; and financial literacy, accompanied by the behavioral dimension in banking supervision ”.

Mário Centeno guarantees that Banco de Portugal will have a “crucial role” in the presidency of the European Union and “should take advantage, together with the Government and on behalf of Portugal, of this opportunity to assert itself in the political framework that will mark the post- pandemic in Europe ”.

In what can be read as another message to his predecessor, Centeno says that “the role of Banco de Portugal cannot be characterized by antagonism or isolationism, but rather by complementarity with the Government, with the other financial supervisors and with the scientific community".

“Banco de Portugal can and must contribute decisively to the definition of coherent national policies and to a national strategy that will allow Portugal to overcome the important challenges facing it in Europe and in the world”, defended Centeno at COF.

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