ECB: Portuguese authorities are the ones that need to decide on the provisions from the Bank of Portugal
The European Central Bank refers the matter to Portuguese authorities, since there are no European guidelines for the matter.
When asked by ECO about the possibility of a legislative modification from the Portuguese Government that changes the provisions and dividends policy, the European Central Bank answered that the issue is handled by national authorities. The ECB also clarifies that “there are no guidelines” for central banks concerning provisions.
“That is an issue for the national authorities”, clarifies an official source from the ECB. This statement puts aside any controversy about possible obstacles from European institutions for the change to move forward, such as the Government, the Socialist Party and the Left Block intend to.
“There are no central guidelines for provisioning”, adds the same source, refusing to make any additional comments on the issue. Also within the organic law of the Bank of Portugal (BdP) there is ambiguity as far as the constitution of provisions, since they are subject to whatever policy the Board of Directors of the central bank wants to implement.
Last Friday, in the presentation of the report on the debt sustainability, the State secretary for the Budget João Leão, inspite of not having signed the document, highlights three measures the Portuguese Government agreed with: one of them was precisely the decrease of BdP‘s provisions and an increase in dividends.
