War of words and legal threats over book shakes Portugal’s banking world

 In Bank of Portugal, Banks, News

Portugal’s Prime Minister António Costa and a former governor of the Bank of Portugal have exchanged legal threats over the postponed publication of a tell-all book.

António Costa has labelled the book a “tissue of lies” and says he is the object of a “political smear campaign” by Carlos Costa who ran Portugal’s central bank between June 2010 and July 2015 when Portugal was mired in an economic, banking and sovereign debt crisis, and the intervention of the Troika which effectively ran the country’s economic affairs during the period.

At the centre of the controversy is the explosive book ‘The Governor’ which contains a series of criticisms and accusations. The prime minister says that “each page is a pack of lies” and that he will defend his “good name and reputation” in the libel courts.

“Every page is a list of lies, half-truths and distortions”, he said to journalists which was then broadcast on RTP3.

“Carlos Costa thought to mount a political attack on my honour and reputation. He is within his rights to do so, but I also have the right to defend my good name”, he said.

Meanwhile, Portuguese bankers on the sidelines of a conference ‘Banking in the Future’ brushed aside the controversy. The CEO of BPI, João Pedro Oliveira e Costa said, “I have not read it and I don’t intend to”.

“We’re concerned about sorting out problems” he said sweeping aside the fact that he is mentioned in the book because of the bank’s former shareholder and Wikileaks target Isabel dos Santos who is at the centre of some of the allegations made in the book. “There have already been public inquiries, there are already people who have’t taken Memofante (a pun on a memory enhancing vitamin popular in Portugal). The story has been told”.

“It’s the latest frothy sensation” said José João Guilherme, a director at Caixa Geral de Depósitos who preferred to point out that Portugal’s banking sector had “never been so well capitalised” and “who said what and to whom about whoever adds nothing”.

Pedro Castro e Almeida, CEO of Santander said he would not be reading “The Governor” . “I haven’t got time to waste on such things” he said,

Miguel Maya, CEO of Millennium bcp said he would read the “bit about BCP” but refused to get drawn into the controversy.

Prime Minister António Costa said that “time would clear up everything” and that “thankfully there are those who know the story”.

“I have been in politics for enough years not to allow anybody to lie about me, my actions and my intentions”, he said.

The Portuguese press widely lampooned the ex-governor of the Bank of Portugal as ‘Mr. Magoo’ – a popular 1990s cartoon figure who had a terrible memory.

This was because when Carlos Costa was called to a public inquiry into alleged poor decision-making and reckless lending, either approved or not controlled by certain top brass bankers, and which almost brought Portugal’s banking system to its knees during his tenure, with several banks going under, he said: “I don’t remember!”

Essential Business has chosen not to repeat any of the allegations, criticisms or alleged slurs in the book against the Portuguese Prime Minister’s character, reputation or actions until formal accusations are cited in a lawsuit which may or may not be pending.