MPs try to block Centeno’s smooth transition to Bank of Portugal

 In Banks, Economy, News

Portuguese MPs have moved to block the appointment of Finance Minister Mário Centeno to the post of next central bank governor.

It has also come to light over the weekend that the ruling PS socialist party is planning to request hearings, including from the European Central Bank, to delay the appointment of a new Bank of Portugal governor as long as possible.
The Bank of Portugal, under its current outgoing governor and his predecessor had been widely criticised for failing to adequately supervise the banking sector and effectively intervene over some of the biggest banking mismanagement scandals in Portugal over the past decade, involving reckless lending, poor financial judgements, casino-style investments and several bank collapses, which resulted in a series of parliamentary enquiries.
Portuguese MPs have approved two proposals that could block a smooth transition for Mário Centeno from the Finance Ministry to the Bank of Portugal.
The PS, however, is said to be preparing obstacles to avoid this block coming into force in time for the successor to the current governor Carlos Costa being appointed.
According to the weekend newspaper Expresso, the order has come “from above” as the Prime Minister is said to be currently minded to appoint the Eurogroup president Mário Centeno to the top banking job in Portugal.
The newspaper reports that António Costa has told Mário Centeno to rest assured that he intends to put forward his name as the next Governor of the Bank of Portugal.
At issue is two proposals from the minority parties PAN (an environmental party) and PEV (Ecology party) which aim to strengthen parliament’s powers in the appointment of the governor of the Bank of Portugal which regulates and supervises the financial system in the country.
The two parties are calling for a ban on appointments of Government members to the governorship of the bank for a period of five years.
In other words, a five year ‘cooling off’ period between a candidate exercising a political role (in Centeno’s case the Minister of Finance), and an appointment to head the Bank of Portugal.
PAN wants to see the proposed bill submitted to a final vote by the end of next week, but the PS party wants the bill discussion delayed.