Opinion of the European Central Bank of 21 May 2019 on the revision of the legal framework of the Portuguese financial supervisory system (CON/2019/19)
Date: 2019-05-21
Institutions: European Central Bank
Subjects: Portugal, banking supervision, board of directors, central bank, competence of the institution, financial stability, financial supervision, institutional reform, national law

EN  

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 21 May 2019 

on the revision of the legal framework of the Portuguese financial supervisory system 

(CON/2019/19) 

Introduction and legal basis 

On 11 January 2019, the European Central Bank (ECB) received a request from the Portuguese Minister 

for Finance for an opinion on a draft law reforming the institutional governance of the Banco de Portugal 

(BdP) and the institutional framework for the Portuguese financial supervisory system (the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning  of  the  European  Union  (TFEU)  and  the  third  and  sixth  indents  of  Article 2(1)  of  Council 
Decision 98/415/EC1,  as  the  draft  law  relates  to  a  national  central  bank,  rules  applicable  to  financial 

institutions  insofar  as  they  materially  influence  the  stability  of  financial  institutions  and markets,  and  the 

specific tasks conferred upon the ECB concerning the prudential supervision  of credit institutions under 

Article 127(6) TFEU. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the 

ECB, the Governing Council has adopted this opinion.  

1. 

Purpose of the draft law 

1.1. 

The two main purposes of the draft law are to reform the institutional governance of the BdP and 

the institutional framework for the Portuguese financial supervisory system.  

Reform of the Banco de Portugal’s institutional governance 

1.2. 

Under the draft law, the BdP’s Management Board is slightly reduced in size, comprising the BdP 

Governor, one or two Vice-Governors and three or four, instead of the current three to five, other 

board  members.  Currently  the  Governor  is  appointed  by  the  Ministerial  Council  on  a  proposal 

from the Minister for Finance, after consulting the competent commission of the Parliament, while 

the other members of the BdP’s Management Board are appointed by the Ministerial Council on a 

proposal from the Governor, after consulting the competent commission of the Parliament. Under 

the draft law, the Governor is no longer to have a role in the appointment procedure for the other 

members of  the BdP’s Management Board,  who, along  with the Governor,  are  henceforth  to be 

appointed by the Ministerial Council on a proposal from the Minister for Finance, after consulting 

the  competent  commission  of  the  Parliament.  The  draft  law  also  precludes  the  appointment  or 

proposed appointment of members of the Management Board during the six months prior to the 

1     Council  Decision  98/415/EC  of  29 June  1998  on  the  consultation  of  the  European  Central  Bank  by  national 

authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

 
 
 
 
 
                                                 
ECB-PUBLIC 

end of the current legislature, or between the call for elections for the Assembly of the Republic or 

the  dissolution  of  the  Government  and  the  parliamentary  investiture  of  the  newly  appointed 

Government,  except  if  the  positions  in  question  are  vacant  and  there  is  urgency  in  proceeding 

with  the  appointment,  in  which  case  the  appointment  or  proposed  appointment  still  depends  on 

confirmation  from  the  newly  appointed  Government.  In  addition,  according  to  the  draft  law,  the 

members  of  the  Management  Board  of  the  BdP  must  be  appointed  from  among  persons  of 

recognised  good  moral  standing,  aptitude,  sense  of  public  interest,  professional  experience, 

management  ability,  knowledge  and  relevant  and  appropriate  technical  competence  for  the 

exercise of their respective functions. 

1.3. 

Currently  the  mandate  of  the  members  of  the  Management  Board  is  five  years,  which  may  be 

renewed once, by the Ministerial  Council, for a further five-year  period.  Under the draft law, the 

duration of the mandate is increased from five to seven years, but without being renewable. 

1.4. 

Currently  the  members  of  the  Management  Board  may  only  be  relieved  of  their  office  by  the 

Ministerial  Council  if  any  of  the  circumstances  set  out  in  Article  14.2  of  the  Statute  of  the 

European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of 

the ESCB’) apply. Under the draft law, a member of the Management Board may only be relieved 

of their office by a resolution of the Ministerial Council, on a proposal by the Minister for Finance 

or  a  recommendation  by  the  Parliament,  in  exceptional  circumstances,  duly  justified,  if  he  no 

longer fulfils the conditions required for the performance of his duties or if he has been guilty of 

serious misconduct. For this purpose, the draft law provides that the following constitute grounds 

for  removal:  (i)  permanent  incapacity;  (ii)  interdiction  or  inability  has  been  judicially  determined; 

(iii)  incompatibility  for  the  exercise  of  the  mandate;  (iv)  final  judicial  conviction  for  a  crime  if  it 

affects  the  fitness  and  propriety  for  the  exercise  of  functions;  or  (v)  the  person  in  question  has 

been imprisoned. The draft law also provides that the Assembly of the Republic may recommend 

that  the  Government  relieve  members  of  the  BdP’s  Management  Board  from  their  office.  The 

draft law also provides that the  term of office of the members of the Management Board and  of 

the Governor may cease due to the BdP’s restructuring by merger or demerger. 

1.5. 

Currently, the remuneration of the members of the Management Board is determined annually by 

a committee composed of the Minister for Finance (or a representative thereof), the President of 

the  Board  of  Auditors  and  a  previous  Governor  appointed  by  the  Advisory  Board,  and  it  cannot 

include  any  variable  component.  Under  the  draft  law,  the  remuneration  is  determined  by  a 

committee  belonging  to  the  Ministry  of  Finance,  and  cannot  be  determined  retroactively  or 

amended during the duration of the mandate.  

1.6. 

The  draft  law  requires  the  BdP  to  comply  with  the  following  principles  when  exercising  its 

competences, in addition to the general principles of administrative law: quality and efficiency in 

its  activity  and  in  its  financial  and  economic  management;  management  by  objectives;  regular 

evaluation; transparency in its activity by disclosing information regarding its activity, organisation 

and  functioning,  including  regarding  the  costs  of  its  activity  for  the  addressees  of  the  BdP’s 

powers; and transparency in the functioning of its bodies and in the management of its staff. 

1.7. 

The draft law introduces a new duty to report information to the Minister for Finance regarding the 

BdP’s  budget  implementation,  accounts  and  annual  and  multi-annual  plans  and  activity  reports. 

2 

ECB-PUBLIC 

The draft law requires the BdP to send its annual report to the Assembly of the Republic, which 

would issue an opinion on such report, and makes provision for the disclosure of information to 

parliamentary committees by the members of the BdP’s internal bodies, and for the disclosure of 

information on the internet. 

1.8. 

The  draft  law  maintains  the  current  provision  in  the  BdP’s  Organic  Law  according  to  which  the 

BdP is not subject to controls by the Court of Auditors in relation to the BdP’s participation in and 

performance  of  the  tasks  assigned  to  the  European  System  of  Central  Banks  (ESCB).  At  the 

same time, the draft law introduces a new provision establishing that the BdP is not subject to the 

regime of audits and inspections by the services of the State in relation to the BdP’s participation 

in and performance of the tasks assigned to the ESCB.  

1.9. 

The draft law amends the provisions governing the liability of the members of  the BdP’s internal 

bodies  and  staff,  and  provides  that  they  may  be  held  directly  and  personally  liable  for  acts  and 

omissions  in  the  performance  of  their  duties.  In  this  respect,  the  draft  law  stipulates  that  the 

State’s general civil liability legal framework applies to the BdP. 

1.10.  The draft law prohibits: (a) the delegation of the BdP’s competences to other entities; (b) the BdP 

from exercising other activities outside its competences; (c) the BdP from using its resources for 

other objectives than those legally authorised; (d) the BdP from guaranteeing the compliance of 

obligations attributed to other entities; and (e) the BdP from participating in the creation of profit-

making entities or acquiring shares in such entities, except when legally authorised. The draft law 

also  imposes  additional  requirements  for  hiring  external  services,  which  is  only  allowed  if  the 

impossibility,  inefficiency  or  the  lack  of  a  timely  response  of  the  BdP’s  own  resources  for  the 

fulfilment of its tasks is duly demonstrated. 

1.11.  The draft law requires the members of the BdP’s Management Board to avoid any situation that 

can influence, limit or impede their ability to act with full independence, probity and impartiality in 

the  performance  of  their  functions.  The  draft  law  establishes  ethics  rules  on  incompatibilities, 

private  financial  transactions,  post-employment  restrictions,  including  compensation,  and  gifts 

and benefits. The draft law establishes an Ethics Committee to analyse and issue declarations on 

matters  regarding  conflicts  of  interest  and  discharge  certain  specific  responsibilities.  The  Ethics 

Committee  is  to  be  composed  of  a  member  appointed  by  the  Management  Board,  a  member 

appointed by the Board of Auditors and a third member, appointed by those other two members, 

as  president  of  the  Ethics  Committee.  The members of  the  Ethics  Committee  are  to  be  chosen 

from  among  people  of  recognised  fitness,  propriety  and  independence  not  having  any  link  or 

contractual relationship with the BdP. The draft law also makes provision for incompatibilities and 

conflicts of interest of the BdP’s staff members and the recruitment of staff members. 

1.12. 

In  order  to  achieve  efficiency,  effectiveness  and  quality  in  the  BdP’s  activities,  the  draft  law 

introduces  performance  indicators  for  the  BdP  which  aim  to  reflect  the  totality  of  the  BdP’s 

activities and results. The  system of performance indicators,  which is to  be  implemented by the 

BdP, must specifically relate to the BdP’s activity plan and the management of human resources, 

including the evaluation of employees’ performance. 

3 

ECB-PUBLIC 

1.13.  The draft law reforms the BdP’s Board of Auditors, amending its designation and composition, the 

duration  of its members’ mandate  and their remuneration. The draft law  also reforms the BdP’s 

Advisory  Board,  amending  its  composition,  the  frequency  of  its  meetings  and  its  manner  of 

functioning.  

1.14.  The  draft  law  confers  powers  for  the  ‘resolution  of  conflicts’  on  the  BdP,  alongside  other 

regulatory, supervisory and sanctioning powers. 

1.15.  The  draft  law  authorises  the  BdP  to  charge  fees  for  its  services  and  acts.  The  draft  law  also 

authorises the BdP to settle or charge fees in the name or on behalf of other national or European 

entities. 

Reform of the Portuguese financial supervisory system 

1.16.  Apart  from  the  changes  introduced  to  the  institutional  governance  of  the  BdP,  the  draft  law 

establishes a National System of Financial Supervision (NSFS) composed of five authorities: the 

BdP,  the  Portuguese  Securities  Market  Commission  (hereinafter  the  ‘Market  Authority’),  the 

Insurance  and  Pension  Funds  Supervisory  Authority  (hereinafter  the  ‘Insurance  Authority’),  the 

Resolution  and  Administration  of  Guarantee  Schemes  Authority  (hereinafter  the  ‘Resolution 

Authority’), which is created by the draft law, and would be the new resolution authority, and the 

National  Council  of  Financial  Supervisors  (NCFS),  which  would  be  responsible  for  coordination 

between  supervisory  authorities  and  would  also  be  the  new  macro-prudential  authority.  As  a 

consequence,  the  BdP  would  no  longer  be  the  Portuguese  macro-prudential  authority  or  the 

Portuguese resolution authority. The draft law introduces new statutes for the Market, Insurance 

and  Resolution  Authorities  and  the  NCFS.  The  draft  law  also  introduces  provisions  for 

collaboration and exchange of information between the different authorities. 

1.17.  The  draft  law  establishes  a  Financial  Stability  National  Committee  (FSNC),  an  advisory  body  of 

the Minister for Finance in financial stability matters which is responsible for coordination between 

the NSFS and the economic, financial and budgetary policies of the State. The President of the 

FSNC would be the Minister for Finance and the other members comprise the BdP Governor and 

the Presidents (or heads) of the other entities comprising the NSFS. 

1.18.  The  draft  law  introduces  the  possibility  that  supervisory  tasks  may  be  entrusted  to  the  BdP  but 

exercised by a different public legal entity under the BdP’s dependency. 

1.19.  Several  amendments  to  the  Regime  Geral  das  Instituições  de  Crédito  e  das  Sociedades 
Financeiras  (hereinafter  the  ‘RGICSF’)2  and  other  legislation  are  introduced  by  the  draft  law  to 

reflect the fact  that  the  BdP  would  no  longer be the  macro-prudential  authority  or the resolution 

authority.  Within  the  professional  secrecy  framework  applicable  to  credit  institutions,  two 

additional possibilities of disclosure by the BdP to the NCFS and to the Resolution Authority have 

been added. 

1.20.  The draft law provides that the tasks of the NCFS in its capacity as the national macro-prudential 

authority are to be: (i) the definition of the national macro-prudential policy, in line with the macro-

2    

Approved  by  Decree-Law  No  298/92  on  the  legal  framework  of  credit  institutions  and  financial  companies 
(Decreto-Lei n.º 298/92, de 31 de Dezembro). 

4 

                                                 
ECB-PUBLIC 

prudential  policy  defined  by  the  European  Systemic  Risk  Board  (ESRB);  (ii)  the  identification, 

monitoring and assessment of systemic risks, taking the specific features of the national financial 

sector into account; and (iii) the adoption of measures for the prevention, mitigation or reduction 

of systemic risks and the monitoring of their implementation.  

1.21.  The draft law provides that the tasks of the NCFS in areas of a horizontal nature or impact on the 

financial  sector  are  intended  to  safeguard  the  stability  of  the  Portuguese  financial  sector.  The 

draft law also provides that the supervisory authorities are to propose to the NCFS the adoption 

of macro-prudential measures with a horizontal impact on the financial sector designed to prevent 

or  mitigate  systemic  risks.  The  draft  law  empowers  the  NCFS  to  adopt  Union  harmonised 

macro-prudential  measures  envisaged  by  Regulation  (EU)  No  575/2013  of  the  European 
Parliament and of the Council3 and Directive 2013/36/EU of the European Parliament and of the 
Council4, which concern credit institutions, in certain cases after a proposal by the BdP. The draft 

law also provides that the NCFS may delegate to the supervisory authorities the implementation 

of  the  adopted  measures.  The  draft  law  further  provides  that  the  supervisory  authorities  are  to 

inform  the  NCFS  of  their  intention  to  adopt  macro-prudential  measures  that  will  not  have  a 

horizontal impact on the financial sector.  

1.22.  Regarding the role of  the  BdP in the NCFS,  the draft law provides that the NCFS Management 

Board  is  to  be  composed  of  seven  members,  including  two  BdP  representatives.  The  BdP 

Governor would lead the meetings of the NCFS Management Board intended for the discussion 

of macro-prudential  matters  and  represent  the  NCFS  with  a  voting  right  at  the  ESRB’s  General 

Board.  

1.23.  The  draft  law  provides  that  the  NCFS  must  cooperate  with  the  ESRB,  the  macro-prudential 

authorities  of  other  States,  the  ECB,  the  European  supervisory  authorities  and  any  relevant 

entities or organisations governing financial stability. 

1.24.  The  draft  law  establishes  a  Remuneration  and  Evaluation  Committee  with  the  task  of  issuing 

technical  opinions  regarding  the  appointment  of  the  members  of  the  management  body  of  all 

NSFS  entities,  including  the  BdP.  These  opinions  are  limited  to  an  evaluation  of  legal 

requirements,  in  addition  to  a  compliance  check  with  reference  to  the  rules  on  incompatibilities 

and impediments. The Committee is to be responsible also for setting the remuneration statutes 

of  such  members,  taking  account  of  criteria  common  to  all  entities  comprising  the  NSFS, 

including  the  activity  of  each  entity  with  reference  to  the  results  of  a  system  of  performance 

indicators.  The  Committee  is  to  be  composed  of  one  member  appointed  by  each  supervisory 

authority  that  comprises  the  NSFS  with  a  president  appointed  by  the  Minister  for  Finance.  The 

Committee  is  to  operate  as  part  of  the  Ministry  of  Finance,  with  its  operating  costs  being  paid 

from the Ministry of Finance’s general expenses.  

3     Regulation  (EU)  No  575/2013  of  the  European  Parliament  and  of  the  Council  of  26  June  2013  on  prudential 
requirements  for  credit  institutions  and  investment  firms  and  amending  Regulation  (EU)  No  648/2012  (OJ  L  176, 
27.6.2013, p. 1). 

4     Directive  2013/36/EU  of  the  European  Parliament  and  of  the  Council  of  26  June  2013  on  access  to  the  activity  of 
credit  institutions  and  the  prudential  supervision  of  credit  institutions  and  investment  firms,  amending  Directive 
2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338). 

5 

                                                 
ECB-PUBLIC 

The Banco de Portugal’s partial financing of Portuguese Competition Authority 

1.25.  The draft law provides that the financing of the Portuguese Competition Authority is to be ensured 

by periodic payments by the BdP, in addition to payments by other sectoral authorities, as well as 

by the fees charged within the scope of the specific activity of the Competition Authority. 

2. 

Observations 

2.1 

Minimum term of office of the Banco de Portugal Governor and grounds for relieving him or her 

from office 

2.1.1.  To  guarantee  the  independence  of  the  Governors  of  the  national  central  banks  (NCBs)  and 

members of the Governing Council of the ECB, each Member State must ensure that the statutes 

of  its  NCB  are  compatible  with  the  Treaties  and  the  Statute  of  the  ESCB  with  regard  to  the 
Governor’s term of office and the grounds for relieving him or her from office5.  

Minimum term of office  

2.1.2.  While the draft law generally provides for a term of office of seven years6, which is longer than the 

minimum  period  of  five  years  required  by  Article  14.2  of  the  Statute  of  the  ESCB,  the  provision 

regarding the appointment of the Governor from  one of the members of the BdP’s Management 
Board,  during  their  term  of  office7,  is  not  compatible  with  the  Statute  of  the  ESCB  insofar  as  it 

stipulates that the former member of the BdP’s Management Board would serve as Governor only 

for  the  remainder  of  his  initial  term  of  office.  As  the  remainder  of  the  initial  term  of  office  of  the 

former member of the BdP’s Management Board (appointed as Governor) may be less than five 

years, the minimum term of office prescribed by the Statute of the ESCB would not be observed. 

Consequently, to bring it in line with the Statute of the ESCB, the draft law needs to be amended 

to  ensure  that  also  when  the  Governor  is  appointed  from  amongst  the  members  of  the  BdP’s 

Management Board, the Governor’s term of office must be no less than five years. 

Grounds for relieving the Governor from office 

2.1.3.  A Governor may be relieved from office only if he ‘no longer fulfils the conditions required for the 
performance of his duties or if he has been guilty of serious misconduct’8. The ECB is of the view 

that  the  concepts  underpinning  the  conditions  under  which  a  Governor  may  be  relieved  from 
office are autonomous concepts of Union law9, the application and interpretation of which do not 

depend  on  a  national  context,  irrespective  of  whether  such  concepts  are  embedded  also  in  the 

BdP’s Organic Law.  

5    

6    
7    
8    
9    

Article 131 TFEU and Articles 14.1 and 14.2 of the Statute of the ESCB. See, in this regard, also ECB Convergence 
Report 2018, part 2.2.3, p. 23 and 24. Available on the ECB’s website at www.ecb.europa.eu. 
Article 33(2) of the BdP’s Organic Law, as amended by the draft law. 

Article 33(4) of the BdP’s Organic Law, as amended by the draft law. 
Article 14.2 of the Statute of the ESCB. 
See, in a similar vein, the opinion delivered by Advocate General Kokott on 19 December 2018, Rimšēvičs v Latvia, 
Joined Cases C-202/18 and C-238/18, ECLI:EU:C:2018:1030, paragraph 77. 

6 

 
                                                 
ECB-PUBLIC 

2.1.4.  Seen in this light, the BdP’s Organic Law is compatible with the Statute of the ESCB insofar as it 
replicates the wording of Article 14.2 of the Statute of the ESCB10. However, the BdP’s Organic 
Law11 would need to be clarified so that it does not aim at further defining the scope of application 
of Article 14.2 of the Statute of the ESCB12, in particular as far as the conditions under  which a 

Governor may be relieved from office are concerned.  

2.1.5.  Given  that,  once  appointed,  a  Governor  may  not  be  relieved  from  office  on  grounds  other  than 

those  mentioned  in  Article  14.2  of  Statute  of  the  ESCB,  the  BdP’s  Organic  Law  is  incompatible 

with  the  Statute  of  the  ESCB  insofar  as  it  provides  for  a  case  in  which  the  appointment  of  the 
Governor  will  depend  on  a  confirmation  from  a  newly  appointed  government13.  This  is  because 

the  absence  of  such  confirmation  would  have  effects  equivalent  to  relieving  the  Governor  from 

office on grounds other than those mentioned in Article 14.2 of Statute of the ESCB, in particular 

since in such cases the objective of safeguarding the Governor’s freedom from political influence 

could no longer be attained.  

2.1.6.  For  the  same  reasons,  the  BdP’s  Organic  Law  is  incompatible  with  the  Statute  of  the  ESCB 

insofar as it provides that the Governor’s term of office may cease due to the BdP’s restructuring 
by merger or demerger14. Irrespective of whether the BdP is subject to a reorganisation process, 

the Governor may be relieved from office only if he or she no longer fulfils the conditions required 

for the performance of his or her duties or if he or she is guilty of serious misconduct.  

2.1.7.  With regard to the procedure for relieving the Governor from office, the ECB notes that, following 

the  amendments  introduced  by  the  draft  law,  not  only  the  Government  but  also  the  Portuguese 

Assembly  of  the  Republic  may  propose  to  the  Ministerial  Council  that  the  Governor’s  term  of 

office  be  terminated.  While  compatible  with  the  Statute  of  the  ESCB,  this  may  introduce  an 

additional level of political pressure in the exercise of the Governor’s responsibilities.  

2.2 

Safeguards for the independence of the other members of the Banco de Portugal’s Management 

Board 

All  members  of  the  NCBs’  decision-making  bodies  must  exercise  the  powers  and  carry  out  the 

tasks  and  duties  conferred  upon  them  by  the  Treaties  and  the  Statute  of  the  ESCB 
independently15.  Given  that  not  only  the  Governor  but  also  the  other  members  of  the  BdP’s 
Management Board are involved in the performance of ESCB-related tasks16, the ECB welcomes 

the fact that, to safeguard their independence, the provisions of the BdP’s Organic Law regarding 

security  of  tenure  apply  not  only  to  the  Governor  but  also  to  the  other  members  of  the  BdP’s 

Management Board. Accordingly, the consulting authority should consider the observations made 

in paragraph 2.1 also in respect of the other members of the BdP’s Management Board.  

10   
11   
12  
13   
14   
15   
16   

Article 33(8) of the BdP’s Organic Law. 
In particular, Article 33(9) of the BdP’s Organic Law, as amended by the draft law. 

Replicated in Article 33(8) of the BdP’s Organic Law. 
Article 27(5) of the BdP’s Organic Law, as amended by the draft law. 

Article 33(12)(d) of the BdP’s Organic Law, as amended by the draft law. 
Article 130 TFEU and Article 7 of the Statute of the ESCB. 
See paragraph 2.2 of Opinion CON/2014/51 and paragraph 3.1.3 of CON/2018/23. All ECB opinions are published 
on the ECB’s website at www.ecb.europa.eu. 

7 

                                                 
ECB-PUBLIC 

2.3 

Appointment  criteria  for  the  Banco  de  Portugal’s  Governor  and  the  members  of  the  Banco  de 

Portugal’s Management Board  

The  ECB  notes  that  the  criteria  of  a  ‘sense  of  public  interest’  and  ‘aptitude’,  introduced  by  the 

draft  law  amongst  the  criteria  to  be  taken  into  account  for  the  appointment  of  the  BdP’s 

Management Board, are somewhat vague and therefore might be difficult to interpret and use in 

practice. Consequently, the ECB suggests reducing the criteria to the other proposed terms which 
were either established a long time ago, such as ‘standing’ and ‘professional experience’17, or are 

more common in the monetary and banking field.  

2.4 

Ethics rules and establishment of the Banco de Portugal’s Ethics Committee 

2.4.1.  The  ECB  notes  that  NCBs  and  national  competent  authorities  (NCAs)  should  comply  with 
Guideline  (EU)  2015/855  of  the  European  Central  Bank  (ECB/2015/11)18  laying  down  the 

principles of a Eurosystem Ethics Framework and with Guideline (EU) 2015/856 of the European 
Central Bank (ECB/2015/12)19 laying down the principles of an Ethics Framework for the  Single 

Supervisory  Mechanism  (SSM).  In  this  regard,  the  ECB  notes  that  the  BdP  has  already 

implemented  these  Guidelines.  The  draft  law  may  thus  be  seen  as  complementing  the  three 
existing internal  acts by  which the  BdP has implemented  the Guidelines20. The ECB Guidelines 

set the minimum standards for ethics rules and do not prevent the application by an NCB or the 

NCAs of more stringent ethics rules to the members of the bodies of Eurosystem central banks 

and national authorities responsible for the prudential supervision of credit institutions.  

2.4.2.  The ECB welcomes the fact that the ethics rules are accompanied by the legal establishment of 

an Ethics Committee. As regards the composition of the Ethics Committee, the independence of 

its members should be beyond doubt. Although they may not have any link or contractual relation 

with the BdP, they should nevertheless avail themselves of a sound understanding of the BdP’s 

objectives,  tasks  and  governance.  Furthermore,  requiring  unanimity  for  the  Ethics  Committee’s 
deliberations21  safeguards  the  probity  and  impartiality  of  its  decisions,  entailing  that  decisions 

cannot be taken against the vote of either the member appointed by BdP’s Management Board or 

the  member  appointed  by  the  BdP’s  Board  of  Auditors.  However,  the  ECB  notes  that  any 
intervention by the Ethics Committee in outsourcing procedures, as envisaged by the draft law22, 

must  not  impair  either  the  BdP’s  ability  to  efficiently  perform  its  tasks  or  its  organisational 

autonomy. 

See, for example, Article 283(2) TFEU and Article 11.2 of the Statute of the ESCB. 

17  
18    Guideline  (EU)  2015/855  of  the  European  Central  Bank  of  12  March  2015  laying  down  the  principles  of  a 
Eurosystem  Ethics  Framework  and  repealing  Guideline  ECB/2002/6  on  minimum  standards  for  the  European 
Central Bank and national central banks when conducting monetary policy operations, foreign exchange operations 
with the ECB's foreign reserves and managing the ECB's foreign reserve assets (ECB/2015/11) (OJ L 135, 2.6.2015, 
p.23). 

19    Guideline  (EU)  2015/856  of  the  European  Central  Bank  of  12  March  2015  laying  down  the  principles  of  an  Ethics 

Framework for the Single Supervisory Mechanism (ECB/2015/12) (OJ L 135, 2.6.2015, p.29). 
‘Regulamento da Comissão de Ética e dos Deveres Gerais de Conduta dos Trabalhadores do Banco de Portugal’, 
an  internal  regulation  of  the  BdP  establishing  rules  for  the  functioning  of  the  Ethics  Committee  and  the  ethical 
behaviour  of  the  BdP’s  staff;  ‘Código  de  Conduta  dos  Membros  do  Conselho  de  Administração  do  Banco  de 
Portugal’, an internal code of conduct for the members of the  BdP’s Management Board; and ‘Código  de  Conduta 
dos Membros do Conselho de Auditoria do Banco de Portugal’, the code of conduct of the BdP’s Board of Auditors. 
Article 49-C(4) of the BdP’s Organic Law, as amended by the draft law. 

Article 49-B(1)(f) of the BdP’s Organic Law, as amended by the draft law. 

20   

21   
22   

8 

                                                 
ECB-PUBLIC 

2.4.3.  Furthermore, the ECB clarifies that any ethics rules are subject to compliance with the principle of 

proportionality  as  a  general  principle  of  law.  This  means  that  also  the  application  of  the 

incompatibility  rules  to  middle  management  positions,  as  established  under  the  BdP’s  Organic 

Law, and the cooling-off periods applicable to the BdP’s Board members and staff, as envisaged 
by the draft law23, should not be disproportionate or unduly hamper the ability to recruit qualified 

staff.  In  this  regard,  the  ECB  refers  to  the  relating  rules  under  the  ECB’s  Code  of  Conduct  for 

High Level ECB-Officials as endorsed by the Governing Council.  

2.5 

Provisions concerning the Banco de Portugal’s recruitment and procurement procedures 

2.5.1.  The  draft  law  subjects  the  BdP  to  specific  rules  concerning:  (a)  the  external  recruitment  of 

intermediate management positions; and (b) public procurement. The ECB considers competitive 

recruitment  procedures,  including  external  procedures,  to  be  an  important  management  tool  for 

an  NCB.  At  the  same  time,  the  BdP’s  ability  to  retain  highly-qualified  staff  by  designing  internal 
career paths should be considered. To safeguard  the BdP’s ability to retain qualified staff24, the 

ECB also suggests that the draft law should be clarified in order not to require such procedures to 

be conducted at fixed intervals such as every three years, given that the draft law establishes a 

three year term for management positions. 

2.5.2. 

In  the  same  vein,  the  additional  conditions  to  be  satisfied  by  the  BdP  when  hiring  external 
services25 should not hinder its ability to effectively discharge its tasks. This operational principle 

is  also  reflected  in  Principle  2(6)  of  the  Basel  Core  Principles  for  Effective  Banking  Supervision 
(the ‘Basel Core Principles’)26 according to which supervisors should have adequate resources to 

conduct effective supervision and oversight. 

2.6 

Auditing regime for the Banco de Portugal’s activities 

2.6.1.  The  accounts  of  the  ECB  and  the  NCBs  must  be  audited  by  independent  external  auditors 

recommended  by  the  ECB  Governing  Council  and  approved  by  the  EU  Council.  The  auditors 

must have full power to examine all books and accounts of the ECB and the NCBs and obtain full 
information about their transactions27. Any national auditing framework of the activities of an NCB 

is expected to take these requirements into account.  

2.6.2.  The  ECB  notes  that,  under  the  draft  law,  the  BdP  remains  subject  to  audits  by  the  Court  of 

Auditors, with the exception of the BdP’s participation in and performance of the tasks assigned 
to the ESCB28.  

2.6.3.  Following  the  amendments  introduced  by  the  draft  law  –  according  to  which  the  BdP  is  not 

subject  to  the  regime  of  audits  and  inspections  by  the  State’s  services  in  relation  to  the  BdP’s 

23   

24   

25   
26   

27   
28  

Article 6(b) of the draft law and Articles 40-B(7), (8), (9) and (10) and Article 57-A(2) of the BdP’s Organic Law, as 
amended by the draft law. 

As  consistently  noted  by  the  ECB  in  its  Convergence  Reports,  Member  States  may  not  impair  an  NCB’s  ability  to   
employ and retain the qualified staff necessary for the NCB to perform the tasks conferred on it by the Treaties and 
the Statute of the ESCB. 
See Article 52-B of the BdP’s Organic Law, as amended by the draft law. 

Basel Committee on Banking Supervision, ‘Core Principles for Effective Banking Supervision’, available on the Bank 
for International Settlements’ website at www.bis.org. 
Article 27 of the Statute of the ESCB. 

Articles 54(7) and 64(2)(d) of the BdP’s Organic Law, as amended by the draft law. 

9 

                                                 
ECB-PUBLIC 

participation in and performance of the tasks assigned to the ESCB29 – the ECB understands that 

the BdP would, in addition to the abovementioned audits by the Court of Auditors, also be subject 
to other types of audits and inspections by the State’s services30 in all areas that do not relate to 

the  BdP’s  participation  in  and  performance  of  the  tasks  assigned  to  the  ESCB.  Such  additional 

audits and inspections by the State’s services would be carried out by administrative services of 
the State such as the Inspecção-Geral de Finanças (IGF, General Inspectorate of Finance)31. The 

IGF  is  an  administrative  body  set  up  within  the  Ministry  of  Finance  acting  under  the  direct 
hierarchical  control  of  the  Minister  for  Finance,  or  the  competent  Secretary  of  State32,  which 
enjoys  technical  autonomy  when  exercising  its  tasks33.  The  IGF  is  responsible  for  exercising 

includes  legal  compliance 
control  over  the  financial  management  of  the  State,  which 
assessments, management and financial audits comprising inspections34. Among other tasks, the 

IGF is responsible for budgetary, economical, financial and asset-related audits and controls, as 

well as audits of systems and performances, inspections, financial-economic analysis and  other 

types  of  examinations  and  controlling  tasks  related  to  the  entities  it  inspects.  The  IGF  is  also 

responsible  for  carrying  out  inspections,  inquiries,  investigations  and  verifications  of  any  public 

services  or  legal  persons  governed  by  public  law,  in  order  to  assess  the  quality  of  services, 

through  their  effectiveness  and  efficiency,  as  well  as  for  carrying  out  disciplinary  proceedings, 

where applicable, for the entities it inspects. 

2.6.4.  The ECB also understands that, under the BdP’s Organic Law, as amended by the draft law, the 

explicit exclusion concerning the BdP’s participation in and performance of the tasks assigned to 

the ESCB from the inspections and audits that the State’s services and the Court of Auditors may 
undertake35 implies that all other activities of the BdP may be included within the scope of  such 

inspections and audits. 

2.6.5. 

In  this  respect,  the  ECB  has  repeatedly  stated36  that  any  State  audit  office  or  similar  body 

entrusted  with such tasks, such as the  IGF or the Court of Auditors, must observe a  number of 

safeguards that aim to preserve the NCB’s independence: (a) the scope of the control should be 

clearly  defined  by  the  legal  framework;  (b)  such  control  should  be  without  prejudice  to  the 

activities  of  the  NCB’s  independent  external  auditors  to  examine  all  books  and  accounts  of  the 

NCB; (c) the audit should comply with the prohibition on seeking to influence the members of the 

29  
30  

31  

32 

33  
34  
35   
36   

Article 54(6) of the BdP’s Organic Law, as amended by the draft law.  

See  Decree-Law  No  276/2007  on  the  legal  framework  on  inspections  from  the  State  services  (Decreto-Lei  n.º 
276/2007, de 31 de Julho). 
See Article 3(1) of Decree-Law No 276/2007 on the legal framework on inspections from the State services, as well 
as Decree-Law No 96/2012, of 23 April, on the General Inspectorate of Finance. 
See  Article  15  of  Decree-Law  No  276/2007.  Also,  pursuant  to  the  Organic  Law  of  the  Ministry  of  Finance,  as 
approved  by  Decree-Law  No  117/2011,  of  15  December,  the  IGF  is  established  as  a  ‘central  service’  integrating, 
within that Ministry, the State direct administration [Article 4(c) of Decree-Law  No  117/2011]. ‘Central services’ are 
organisational  structures  within  the  State’s  direct  administration  subject  to  the  hierarchical  power  of  the 
corresponding member of Government [see Articles 2(1) and 3(2) of Law No 4/2004 which lays down the principles 
and rules governing the State direct administration]. 
See Article 10 of Decree-Law No 276/2007. 

See Article 2 of Decree-Law No 96/2012.  
Articles 54(6),(7) and 64(2)(d) of the BdP’s Organic Law, as amended by the draft law. 
See, for example, paragraph 3.1.1 of Opinion CON/2018/45, paragraph 2.2 of Opinion CON/2017/24 and paragraph 
2.2 of Opinion CON/2016/59, as well as the ECB Convergence Report 2018, part 2.2.3, p.27. 

10 

                                                 
ECB-PUBLIC 

NCBs’ decision-making bodies in the performance of their ESCB-related tasks and be carried out 

on a  non-political,  independent  and  purely  professional basis. In  addition,  audits concerning  the 

BdP’s  supervisory  activities  should:  (i)  not  extend  to  the  application  and  interpretation  of 

supervisory law and practices in the context of the SSM; and (ii) not interfere with or include the 
tasks conferred on the ECB by Council Regulation (EU) No 1024/201337. Given the broad scope 

of the IGF’s powers and the fact that the IGF is an administrative body set up within the Ministry 

of  Finance  under  the  direct  hierarchical  control  of  the  Minister  for  Finance,  the  inspections  and 

audits performed by such a body would not be compatible with the abovementioned safeguards 

aimed at preserving the BdP’s independence.  

2.7 

The Banco de Portugal’s transparency obligations and reporting to Parliament  

2.7.1.  As  with  any  transparency  duties,  the  rules  on  the  information  to  be  published  on  the  BdP’s 
website38 must be compatible with professional secrecy obligations laid down in the Statute of the 
ESCB39  and  secondary  Union  law40,  in  particular,  having  regard  to  the  importance  of 

confidentiality in the banking supervisory and crisis management contexts. Accordingly, the ECB 

understands  that  the  considerations  underlying  the  exceptions  from  publication  of  certain 

information provided for by the BdP’s Organic Law would apply not only to the summaries of the 

meetings of the BdP’s bodies but also to the opinions and reports of the Advisory Board and the 

Board of Auditors.  

2.7.2. 

In  addition,  with  regard  to  the  opinions  and  reports  of  the  Advisory  Board  and  the  Board  of 

Auditors, the ECB suggests that careful consideration be given to the impact of the publication of 

the  opinions  and  reports  of  these  internal  bodies  of  the  BdP  on  the  BdP’s  functioning  and  its 

decision-making process, also taking into account financial stability concerns resulting from such 

publication’s impact on the market, in particular  where they relate to internal matters of  the BdP 

and are meant exclusively for the internal use of the BdP. 

2.7.3.  Finally,  regarding  the  disclosure  of  information  to  parliamentary  committees  by  the  members  of 
the  BdP’s  internal  bodies41,  the  ECB  notes  that  appropriate  safeguards  must  be  in  place  to 

ensure  that  professional  secrecy  obligations  under  Union  law  are  observed,  including  the 
conditions for the disclosure of confidential supervisory information42.  

2.8 

Liability of the Banco de Portugal and its staff 

2.8.1  The  draft  law  amends  the  liability  framework  applicable  to  the  BdP’s  Management  Board 

members  and  staff,  inter  alia,  by  eliminating  the  current  provisions  according  to  which  liability 

claims  related  to  the  performance  of  the  BdP’s  tasks  by  such  persons  may  only  be  directed 

against  the  BdP  itself,  which  may  later  have  recourse  to  its  staff  with  respect  to  any  damages 

38   
39   
40   
41   
42  

37    Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank 
concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p.63). 
Articles 66(1) and 67 of the BdP’s Organic Law, as amended by the draft law. 

Article 37 of the Statute of the ESCB. 
See, for example, Article 27 of Regulation (EU) No 1024/2013. 
Article 66(3) of the BdP’s Organic Law, as amended by the draft law. 

See, for example, Article 59 of Directive 2013/36/EU. 

11 

                                                 
ECB-PUBLIC 

incurred.  According  to  the  draft  law43,  the  members  of  the  BdP’s  internal  bodies  (Governor, 

Management  Board,  Board  of  Auditors,  Advisory  Board  and  Ethics  Committee),  as  well  as 

members  of  staff,  may  be  held  personally  liable  for  the  performance  of  their  tasks,  with  the 

possibility  of  legal  proceedings  being  brought  directly  against  them  by  third  parties.  In  such  a 

case, the legal support of the members of the BdP’s internal bodies and staff would nonetheless 

be guaranteed by  the BdP itself,  without prejudice  to  the  BdP’s right of redress  against them, if 

such  is  the  case.  In  addition,  under  the  draft  law,  the  State’s  general  civil  liability  legal 
framework44  applies  to  the  BdP,  which  confers  on  the  BdP’s  Management  Board  members  and 

staff  a  level  of  protection  according  to  which  they  could  be  held  liable  for  acts  or  omissions 

committed  with  minor  negligence  (‘culpa  leve’),  which  is  a  low  degree  of  negligence,  when 

performing  their  functions.  This  means  that  there  is  no  requirement  for  such  persons  to  have 
acted either with intention or with gross negligence45. 

2.8.2  The  ECB  notes  that  the  new  liability  regime  may  have  a  particular  impact  on  the  BdP  staff 

performing  supervisory  tasks,  given  that  the  adoption  of  individual  supervisory  decisions  when 

pursuing such tasks is connected to the risk of litigation against the supervisor by the supervised 

credit  institution  or  by  other  affected  stakeholders.  Such  actions  may  relate,  for  example,  to  an 

alleged reduction of profit,  the loss of business opportunity, injury to commercial reputation, etc. 

Litigation  of  this  kind  may  be  brought  quite  irrespectively  of  the  correctness  of  any  prudential 

measures adopted, especially where several categories of stakeholders with competing interests, 

e.g. the creditors of a failing bank, are involved. In order to address this litigation risk present in 

the  operation  of  prudential  supervisors,  Principle  2  of  the  Basel  Core  Principles  states  that:  (a) 

laws  should  protect  the  supervisor  and  its  staff  against  lawsuits  for  actions  taken  and/or 

omissions made  while discharging  their duties in good faith; and (b)  the supervisor and its staff 

should be adequately protected against the costs of defending any actions and/or omissions they 
make while discharging their duties in good faith46. The ECB notes that, while in principle it is a 

matter for national law to determine the scope of liability connected with the performance of the 

tasks of NCAs, it is also important for the functioning of the SSM that the national liability regimes 

offer  standards  of  legal  protection  commensurate  with  the  Basel  Core  Principles.  If  the  legal 

protection  offered  to  the  staff  of  the  BdP  is  inadequate,  the  position  of  any  of  the  BdP  staff 

members involved in joint supervisory teams (JSTs) within the SSM may be compromised, given 

that instructions given to such staff by the JST coordinator in line with Article 6(1) of Regulation 
(EU)  No  468/2014  of  the  European  Central  Bank47 may  lead  to  personal  liability  claims  against 

such staff. Therefore, the ECB suggests maintaining the present liability regime, which is aligned 

with the Basel Core Principles, whereby liability claims may be brought against the BdP only, thus 

See Article 7 of Law No 67/2007, of 31 December. 
Principle 2, essential criterion 9.  

Article 62 of the BdP’s Organic Law, as amended by the draft law. 
Article 64(2)(c) of the BdP’s Organic Law, as amended by the draft law. 

43  
44  
45  
46   
47    Regulation  (EU)  No  468/2014  of  the  European  Central  Bank  of  16  April  2014  establishing  the  framework  for 
cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent 
authorities  and  with  national  designated  authorities  (SSM  Framework  Regulation)  (ECB/2014/17)  (OJ  L  141, 
14.5.2014, p. 1).  

12 

                                                 
ECB-PUBLIC 

excluding the direct individual liability of members of the BdP’s governing bodies and  the BdP’s 

staff.  

2.8.3 

In  this  context,  the  ECB  recalls  that  Basel  Core  Principle  2  requires  that  banking  supervisors 

possess operational independence which implies, in particular, that: (i) there is no government or 

industry  interference  that  compromises  the  operational  independence  of  the  supervisor  and  (ii) 

the supervisor has full discretion to take any supervisory actions or decisions regarding the banks 

and banking groups under its supervision. 

2.8.4  The  ECB  notes  that  the  new  liability  regime  may  have  a  particular  impact  on  the  BdP’s 

Management Board members and staff also in the context of crisis management, when the BdP 

may need to act effectively and swiftly in order to protect the stability of the Portuguese financial 

system.  

2.9 

Remuneration and Evaluation Committee  

As the ECB has repeatedly stated, Member States may not impair an NCB’s ability to recruit and 

retain the qualified staff necessary for the NCB to perform independently the tasks conferred on it 
by the Treaties and the Statute of the ESCB48. Accordingly, the amendments to the rules on the 

exercise of the Remuneration and Evaluation Committee’s powers for setting the remuneration of 
all  members  of  the  management  body  of  all  entities  comprising  the  NSFS,  including  the  BdP49, 

concerning  the  remuneration  of  members  of  the  BdP’s  decision-making  bodies  and  its 

employees, would need to be decided in close and effective cooperation with the decision-making 
bodies of the BdP to ensure the ongoing ability of the NCB to independently carry out its tasks50. 

2.10  Monetary financing prohibition 

2.10.1  The  limits  deriving  from  the  prohibition  of  monetary  financing  under  Article  123(1)  TFEU  should 

be  taken  into  account  when  designing  the  new  institutional  framework  for  the  financial 

supervisory system in Portugal, where the BdP is concerned. The ECB has repeatedly stated that 

national legislation may not require an NCB to finance the performance of functions by the public 
sector51, as this would have effects equivalent to that of a credit facility. Hence, although a credit 

facility  implies  an  obligation  to  repay  the  funds,  Article  123(1)  TFEU  also  applies  to  forms  of 

financing that do not entail an obligation to repay the funds. 

2.10.2  In particular, the ECB notes that the draft law makes provision for the financing of the Competition 
Authority by, inter alia, the BdP52. However, there are no indications that the authorisation given 

by the draft law to the BdP to settle or charge fees in the name or on behalf of other national or 

48   

49   
50   
51   
52   

See, for example, paragraph 2.2 of Opinion CON/2008/9; paragraph 3.2.2 of Opinion CON/2008/10; paragraphs 2.2 
and 2.3 of Opinion CON/2009/45; paragraph 2.2 of Opinion CON/2009/47; paragraph 4.1 of Opinion CON/2010/42; 
paragraph  3.1.1  of  Opinion  CON/2010/51;  paragraph  2.1  of  Opinion  CON/2013/92;  paragraph  3.1.1  of  Opinion 
CON/2014/12; and paragraph 4.1.1 of Opinion CON/2014/38. 
Article 32 of the draft law. 

See paragraph 2.1 of Opinion CON/2013/92 and paragraph 4.1.1 of Opinion CON/2014/38. 
See ECB Convergence Report 2018, part 2.2.5.1, p. 30. 
See Article 5(3) of the Competition Legal Framework and Article 35(1) of the Statutes of the Competition Authority, 
as amended by the draft law.  

13 

                                                 
ECB-PUBLIC 

European  entities53  entrusts  the  BdP  with  the  task  of  charging  fees  within  the  scope  of  the 

specific activity of the Competition Authority.  

2.10.3  The proposed financing of the Competition Authority  by the BdP would be incompatible with the 

prohibition of monetary financing under Article 123(1) TFEU, which, inter alia, prohibits overdraft 

facilities  or  any  other  type  of  credit  facility  with  an  NCB  in  favour  of  the  public  sector.  To  the 

extent that the performance of the Competition  Authority  is not only financed by funds provided 

by  the  sectorial  regulatory  authorities  and  by  the  fees  charged  within  the  scope  of  its  specific 

activity,  but  also  by  funds  provided  by  the  BdP,  the  objective  of  Article  123(1)  TFEU,  i.e.  the 
maintenance of a sound budgetary policy of Member States, is circumvented54.  

2.10.4  For the same reasons, the exercise by a different public legal entity of tasks entrusted to the BdP 

may not be established in a way such that the BdP would simply finance a public entity without 

having control over it, e.g. a set up similar to the proposed financing of the Competition Authority. 

In  this  respect,  it  would  need  to  be  assessed  whether  the  BdP’s  financial  contribution  is 

proportionate to the BdP’s overall participation and role in the performance of tasks by the public 

entity concerned.  

2.11  Possibility of supervisory tasks entrusted to the Banco de Portugal being exercised by a different 

public legal entity 

2.11.1   The ECB understands that, at this stage, the draft law only establishes the possibility that, in the 

future,  a  different  public  legal  entity  under  the  dependency  or  authority  of  the  BdP  may  be 
entrusted  with  supervisory  tasks55.  The  ECB  would  have  to  be  consulted  under  Articles  127(4) 

and  282(5)  TFEU  on  any  further  legislation  creating  or  developing  the  framework  under  which 

supervisory  tasks  currently  entrusted  to  the  BdP  are  to  be  exercised  by  a  different  public  legal 

entity. Moreover, the ECB recommends that any such potential activation of the enabling clause 

is  preceded  by  close  and  effective  cooperation  with  the  BdP,  taking  due  account  of  the  BdP’s 

views, to ensure the operational independence of the banking supervisor.  

2.11.2  Basel Core Principle 2 requires that banking supervisors possess operational independence (with 

the  implications  referred  above  in  paragraph  2.8.3).  This  principle  is  reflected  in  relation  to  the 

SSM in Article 19 of the SSM Regulation, which requires that the NCAs participating in the SSM 

must  act  independently  and  that  the  governments  of  the  Member  States  and  any  other  bodies 

must respect that independence. Therefore, the ECB recommends that the provisions regarding 

the  establishment  and  operation  of  a  separate  public  legal  entity  responsible  for  performing 

supervisory  tasks  under  the  authority  of  the  BdP,  should  expressly  include  independence 

safeguards for such a legal entity analogous to those specified in the BdP’s Organic Law.  

2.11.3   The  ECB  recommends  that  the  provisions  regarding  the  establishment  and  operation  of  a 

separate public legal entity, together with the BdP’s Organic Law, ensure the clear assignment of 

the  NCA  status  in  Portugal  and  specify  the  BdP’s  competence  to  steer  the  performance  of  the 

NCA  functions  within  the  SSM,  in  particular  those  connected  to  participation  in  the  Supervisory 

Article 52-A(3) of the BdP’s Organic Law, as amended by the draft law.  
See paragraph 2.3 and 2.4 of Opinion CON/2017/43. 

53   
54   
55        Article 17(6) of the BdP’s Organic Law, as amended by the draft law. 

14 

                                                 
ECB-PUBLIC 

Board,  the  JSTs  and  other  SSM  structures.  In  addition,  the  creation  of  a  separate  public  legal 

entity  responsible  for  prudential  supervision  tasks  under  the  authority  of  the  BdP  should  not 

interfere with the effective performance of the BdP’s other tasks related to the functioning of the 

European  System  of  Financial  Supervisors,  such  as  the  BdP’s  contributions  to  the  work  of  the 

ESRB,  as  well  as  the  BdP’s  ancillary  tasks  related  to  the  operation  of  the  Single  Resolution 

Mechanism, such as tasks related to resolution planning.    

2.12 

The Banco de Portugal’s powers regarding the resolution of conflicts 

Regarding the powers for the ‘resolution of conflicts’ to be conferred on the BdP under the draft 
law56,  alongside  other  regulatory,  supervisory  and  sanctioning  powers,  the  ECB  considers  that 

the  term  ‘resolution  of  conflicts’  is  not  clear  in  this  context.  Such  powers  are  not  currently 

conferred on the BdP, as they are not included within the current set of powers conferred on the 

BdP  for  supervising  relations  between  banks  and  their  customers.  The  ECB  suggests  that  the 

draft law be further clarified in this respect. 

2.13  National Council of Financial Supervisors 

The draft law is not clear regarding the NCFS’s task of coordinating the answers to requests from 
national  and  foreign  entities  as  well  as  international  organisations57.  The  impact  of  this  power 

should  be  carefully  assessed,  because  if  all  queries  need  to  be  addressed  to  the  NCFS  and 

coordinated  by  this  entity,  this  may  substantially  delay  the  BdP’s  ability  to  respond  as  an  NCA 

within the SSM framework.  

2.14 

The Banco de Portugal’s role in macro-prudential policy 

2.14.1  The ECB supports the effective design of macro-prudential policy frameworks within the Member 

States,  in  line  with  the  guiding  principles  expressed  in  Recommendation  ESRB/2011/3  of  the 
European  Systemic  Risk  Board58.  The  attribution  to  the  NCFS  of  coordination  between 

supervisory  authorities  and  the  powers  of  acting  as  a  new  macro-prudential  authority  is  noted. 

However,  in Member States with a relatively small financial market, such as Portugal, there are 

arguments,  from  the  perspective  of  efficiency  and  synergies,  for  concentrating  supervisory  and 
macro-prudential responsibilities within a single authority59. 

2.14.2  According to Recital 24 of Regulation (EU) No 1092/2010 of the European Parliament and of the 
Council60 and Recommendation ESRB/2011/3, the ECB and the NCBs should play a leading role 

Article 12-B of the BdP’s Organic Law, as amended by the draft law. 

56   
57  
58    Recommendation of the European Systemic Risk Board of 22 December 2011 on the macro-prudential mandate of 

Article 10(1)(a) of the draft NCFS’s Statutes, attached as Annex III to the draft law. 

59   
60  

national authorities (ESRB/2011/3) (OJ C 41, 14.2.2012, p.1). 

See paragraph 4 of Opinion CON/2005/39 and paragraph 2 of Opinion CON/2013/56. 
Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November on European Union 
macro-prudential  oversight  of  the  financial  system  and  establishing  a  European  Systemic  Risk  Board  (OJ  L  331, 
15.12.2010,  p.  1).  Recital  24  of  the  Regulation  states:  ‘The  ECB  and  the  national  central  banks  should  have  a 
leading role in macro-prudential oversight because of their expertise and their existing responsibilities in the area of 
financial  stability.  National  supervisors  should  be  involved  in  providing  their  specific  expertise.  The  participation  of 
micro-prudential supervisors in the work of the ESRB is essential to ensure that the assessment of macro-prudential 
risk  is  based  on  complete  and  accurate  information  about  developments  in  the  financial  system.  Accordingly,  the 
chairpersons  of  the  ESAs  should  be  members  with  voting  rights.  One  representative  of  the  competent  national 
supervisory authorities of each Member State should attend meetings of the General Board, without voting rights. In 
a spirit of openness, 15 independent persons should provide the ESRB with external expertise through the Advisory 
Scientific Committee’. 

15 

                                                 
ECB-PUBLIC 

in  macro-prudential  oversight,  given  their  expertise  and  existing  responsibilities  in  the  area  of 
financial  stability61.  However,  it  is  doubtful,  or  at  least  not  clear,  whether  the  draft  law  complies 
with this principle62. Notwithstanding the fact that the draft law envisages that the BdP Governor 

will lead discussions on macro-prudential matters during the meetings of the NCFS Management 
Board63,  given  that  the  BdP  would  only  have  two  representatives  on  the  NCFS  Management 
Board64,  it  seems  doubtful  whether  the  BdP  would  maintain  a  leading  role  in  macro-prudential 

policy.  Furthermore,  the  fact  that  the  BdP’s  Governor  would  represent  the  NCFS  with  a  voting 

right at the ESRB General Board does not, of itself, seem to envisage a leading role for the BdP. 

2.14.3  The  interaction  between  the  BdP  and  the  NCFS  regarding  systemic  risk  assessment  and  the 

implementation of macro-prudential measures also seems unclear. Under the draft law, it seems 

that the NCFS and the BdP will assess systemic risk in parallel. However, the interaction between 
the BdP and the new macro-prudential or designated authority65 is not clearly defined in the draft 

law, which raises concerns regarding the implementation of the new macro-prudential regime and 

in particular the activation of macro-prudential instruments. The BdP’s participation in the NCFS 

should  allow  for  effective  follow-up  of  systemic  risks  identified  in  the  course  of  the  BdP’s 

analytical activity.  Consideration should be given  to the assignment of  a more prominent role to 

BdP, not only in the provision of analytical support to the NCFS, but also in steering the way in 

which  the  NCFS  works.  Also,  the  draft  law  could  be  clearer  as  regards  the  allocation  of  tasks 

concerning the activation of such instruments (see paragraph 2.15). 

2.14.4  Finally, the ECB welcomes the provisions of the draft law requiring the NCFS to cooperate with, 
inter  alia,  the  ECB,  the  ESRB  and  other  national  macro-prudential  authorities66.  As  previously 
noted by the ECB67, it should be ensured that the new macro-prudential authority also cooperates 

and exchanges data and information with the ECB and the ESRB, in accordance with the ESRB 

Recommendations. 

2.15  Scope and allocation of powers between the macro-prudential authority and the BdP in its role as 

sectorial authority 

2.15.1  Clear  and  expeditious  procedures  should  be  established  for  assigning  instruments  to  the 

macro-prudential authority, which must have control over appropriate instruments for achieving its 

61   

62  

63   
64   
65  

66   
67   

See  also  paragraph  4  of  Opinion  CON/2005/39;  paragraph  2  of  Opinion  CON/2013/56;  paragraph  2.1  of  Opinion 
CON/2013/66;  paragraph  2.1  of    Opinion  CON/2013/54;  paragraph  2.1  of  Opinion  CON/2013/45;  paragraph  2.1  of 
Opinion  CON/2013/30;  paragraph  5.2  of  Opinion  CON/2014/46;  paragraph  2.3  of  Opinion  CON/2014/21;  and 
paragraph 3.1 of Opinion 2019/10. 
As noted by the ESRB,  a central bank’s leading role is ensured by the fact that: (i) the central bank is the macro-
prudential authority; (ii) the central bank accounts for the majority of representatives with voting power on the board 
when decisions are taken on a majority basis; or no veto power is conferred on other board members, as is the case 
when  decisions  are  taken  by  consensus;  (iii)  the  central  bank  conducts  macro-prudential  analysis;  (iv)  the  central 
bank  prepares  the  main  documents  to  be  discussed  by  the  board;  (v)  and/or  the  central  bank  is  responsible  for 
providing the board’s secretariat; (vi) and/or the central bank governor chairs the board and has a casting vote. 

Articles 30(1) and 36(5) of the Statutes of the NCFS, attached as Annex III to the draft law. 
Article 36 of the Statutes of the NCFS, attached as Annex III to the draft law. 

It is assumed from the text of the draft law, although this is not entirely clear, that the NCFS becomes the designated 
authority as well as the macro-prudential authority, instead of the BdP. 
Articles 19(2) and 22 of the Statutes of the NCFS, attached as Annex III to the draft law. 

See paragraph 2.4 of Opinion CON/2013/54 and paragraph 2.6 of Opinion CON/2013/70. 

16 

                                                 
ECB-PUBLIC 

objectives68. It is not clear in the draft law if the NCFS has decision-making power, or a power to 

make public recommendations on existing macro-prudential instruments, as well as the power to 

decide  on  new  macro-prudential  instruments  or  to  make  related  recommendations  to  the 

legislature.  Also,  it  could  be  clarified  who  will  be  responsible  (NCFS  or  BdP)  for  enforcing 

macro-prudential decisions, including the exercise of powers to apply sanctions as well as which 

instruments are under the direct control of the NCFS and which fall under the control of the BdP. 

Furthermore, it is not clear what precisely is meant by measures of a horizontal nature, as there is 
no explicit criterion established by the draft law69.  

2.15.2  The  draft  law  provides  that  the  NCFS  is  responsible  for  the  adoption  of  measures  and  the 
monitoring of their implementation70. However, it  is not clear  whether this adoption of measures 

concerns  only  measures  with  horizontal  impact  or  also  any  of  the  other  macro-prudential 

measures,  since  the  NCFS  is  given  powers  to  adopt  the  Union  harmonised  macro-prudential 

measures  envisaged  by  Regulation  (EU)  No  575/2013  and  Directive  2013/36/EU,  which  apply 

only to credit institutions, while under other provisions of  the draft law the NCFS should only be 

informed by the supervisory authorities of their intention to adopt macro-prudential measures that 

do  not  have  a  horizontal  impact  on  the  financial  sector.  Furthermore,  it  is  also  unclear  how  the 

competent  supervisory  authority  will  interact  with  the  macro-prudential/designated  authority 

regarding the activation of Articles 124 and 164 of Regulation (EU) No 575/2013, which apply to 

the  residential  and  commercial  real  estate  exposures  of  banks  on  the  basis  of financial  stability 

concerns.  

2.15.3  A  clear  identification  of  macro-prudential  instruments  available  to  the  NCFS  and,  where 

applicable,  to  sectoral  supervisory  authorities  such  as  the  BdP  would  thus  be  welcomed 

(including  Union  harmonised  and  non-harmonised  measures),  allowing  for  more  clarity  when 

exercising macro-prudential powers.  

2.16 

The Banco de Portugal’s role relating to resolution planning 

2.16.1  Although  the  draft  law  provides  for  the  establishment  of  the  Resolution  Authority,  which  would 

take  over  the  BdP’s  responsibilities  as  the  designated  national  resolution  authority  (NRA),  the 
BdP would retain specific competences related to resolution planning under the draft law71, while 

the  Resolution  Authority  would  be  responsible  for  exercising  resolution  powers  and  tools.  It  is 
worth noting that, under Directive  2014/59/EU  of the European  Parliament and of the Council72, 

NRAs  are  responsible  for  drawing  up  resolution  plans,  while  NCAs,  within  the  meaning  of 

Regulation  (EU)  No  575/2013,  have  a  purely  consultative  role,  unless  such  NCAs  are  also 

See, in particular, Article 6 and Article 26(1) of the Statutes of the NCFS, attached as Annex III to the draft law. 

68    Recommendation C(4) of Recommendation ESRB/2011/3. 
69  
70   
71   

Article 19 of the Statutes of the NCFS, attached as Annex III to the draft law. 
Article 17-A of the BdP’s Organic Law, as amended by the draft law; Article 2(1) and Article 8 of the Statutes of the 
Resolution Authority, attached as Annex IV to the draft law. 

72    Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014, establishing a framework for 
the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, 
and  Directives  2001/24/EC,  2002/47/EC,  2004/25/EC,  2005/56/EC,  2007/36/EC,  2011/35/EU,  2012/30/EU  and 
2013/36/EU,  and  Regulations  (EU)  No  1093/2010  and  (EU)  No  648/2012,  of  the  European  Parliament  and  of  the 
Council (OJ L 173, 12.6.2014, p. 190). 

17 

                                                 
ECB-PUBLIC 

designated  as  NRAs73.  It  seems  that  the  BdP’s  role  as  an  NCA74  would,  of  itself,  not  provide  a 

sufficient legal basis for the BdP to retain resolution planning competences, in the absence of its 

designation as an NRA.  

2.16.2  In this context, it is also noted that the corresponding articles of the RGICSF regarding resolution 
plans75  are  amended  by  the  draft  law  to  replace  the  references  to  the  BdP  with  general 

references  to  the  ‘resolution  authority’.  It  could  therefore  be  useful  to  clarify  the  legal  basis  on 

which the BdP would assume ancillary resolution-related tasks, given that it apparently would no 
longer be the NRA76. Identification of the resolution authority or authorities designated by Portugal 

in accordance with Article 3 of Directive 2014/59/EU in relation to all or part of the competences 

set  out  therein,  as  the  case  may  be,  can  also  be  important  for  the  NCA  within  the  meaning  of 

Regulation (EU) No 575/2013, as regards information exchange and cooperation activities  vis-á-

vis the relevant resolution authority or authorities, under the applicable legal framework. 

2.16.3  Moreover,  a  segregation  of  resolution-related  tasks,  in  particular,  segregation  of  resolution 

planning  and  the  exercise  of  resolution  powers  and  tools,  is  permitted  under  Directive 

2014/59/EU on an exceptional basis, to the extent that it is ensured that such separation does not 

hamper  the  effectiveness  of  resolution  action.  Separation  creates  a  need  for  close  cooperation 

and  adequate  information  sharing  between  the  Resolution  Authority  and  the  BdP,  notably  to 

ensure that timely resolution action can be taken. To this end, it would be advisable to review and 

reinforce  the  adequacy  of  the  relevant  cooperation  provisions  of  the  draft  law,  including  the 

sharing of information between authorities. However, regardless of the adequacy of cooperation 

and information sharing mechanisms, consolidation of resolution functions can serve to enhance 
the effectiveness of the resolution process, which is already complex in its own right77. In the face 

of such a complex process, operational and practical difficulties due to eventual grey areas within 

the distribution of competences between authorities should be avoided. Given that the BdP would 

be in the lead  for resolution planning and the Resolution  Authority  would be responsible for the 

execution of resolution tools, it would be important that there is a common understanding on the 
resolution plan78, also considering that there is a reputational risk for the BdP in the event of the 

non-successful execution of resolution plans by the Resolution Authority. 

2.16.4  Concerning the creation of a new authority responsible for the exercise of resolution powers and 

tools,  Member  States  should  ensure  that,  where  the  central  bank  is  not  itself  the  resolution 

authority, the competent authority and the resolution authority engage in an adequate exchange 
of information with the central bank79. 

73  
74   
75   
76  

77   

78   
79  

See Article 10 of Directive 2014/59/EU.  
See Article 17 of the BdP’s Organic Law, as amended by the draft law.  

In particular, Article 116-J of the RGICSF, as amended by the draft law.  
In  particular,  the  relationship  between  the  references  in  the  RGICSF  to  ‘resolution  authority’  outside  Title  VIII, 
Chapter III of the RGICSF  and  Article 2(1) of the Resolution Authority’s draft Statutes, which qualifies the latter as 
the NRA, should therefore be clarified. 

See  International  Monetary  Fund  (IMF),  Spain:  Financial  Sector  Assessment  Program-Technical  Note-Bank 
Resolution and Crisis Management Frameworks, 13 November 2017. Available on the IMF’s website at www.imf.org.  
See paragraph 3.2 of Opinion CON/2015/19.  

See paragraph 3.1 of Opinion CON/2012/99. 

18 

                                                 
This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 21 May 2019. 

[signed] 

The President of the ECB 

Mario DRAGHI 

ECB-PUBLIC 

19