has been in the last three years in keeping portuguese bonds interest rates relatively low? one of the main factors why portuguese rates went down was that the country completed the programme. so you don ’ t feel that the country is dependent on the ecb ’ s low interest rates and its promise of support in case of need? we have seen that interest rates in portugal have recently gone higher. this shows that market discipline is present, in spite of the fact that the ecb is buying sovereign bonds. portugal should not forget this message : market discipline is still there. and then there are the ratings. in the asset purchases, we look at the assessment of rating agencies. there is one with the minimum, and it is bbb - … if portugal loses that rating, what would the ecb do? it ’ s very clear, we only buy investment - grade assets. we can have a rating waiver, but this is subject to a programme. so there is no ambiguity there. don ’ t you think it ’ s strange that the ecb ’ s action regarding portugal is dependent on a single rating agency? the ecb relies on four recognised rating agencies and has an economics department looking at the vulnerability of countries. probably better than the ones at dbrs, i assume? the rating agencies have to fulfil a set of criteria. you can say : why don ’ t you do your own ratings? we certainly can and do make an analysis to cross - check the conclusions and bis central bankers ’ speeches assessments of the rating agencies. but it is good practice to have this cross - checking going in both directions : our assessment also needs some double - checking by outsiders. the imf calculates that, at the present rate, the ecb will reach the limit of portuguese bonds that it can buy at the end of the year. will portugal have a problem here? i don ’ t want to comment on this. you talked about market reactions to the latest developments in portugal. and you, are you worried? the markets are somewhat worried, but not excessively. so there ’ s still the benefit of the doubt. the fiscal direction has been confirmed but a number of things are not clear for the budget of 2016. and the number for nominal gdp growth looks on the high side. there is a political declaration of continuity and of following the rules in europe, that ’ s positive, but there are some doubts about the details and the macro assumptions. so it is something we are following

##metric shocks, there was no compensation by other countries. it is a problem that is quite difficult to solve, but it is a fact that emu hasn ’ t functioned very well in this respect. one worry is that the fundamental reflection about how to make emu work better is not advancing sufficiently. not all is negative, of course. we have managed to set up better mechanisms to deal with sovereign debt crises, but you are still in an unclear position when dealing with issues of sovereign debt. and we have banking union, we are especially advanced in terms of supervision, but we have not finished it. the fact that banking union is not finished, doesn ’ t that lead to small banks in small countries being bought by big banks from big countries? i know this is a big discussion here in portugal. i always have problems in understanding why that would be a problem. i experienced the crisis in belgium with fortis, and that bank represented a huge risk for that country. now, it is part of bnp and this has been absolutely instrumental in avoiding a catastrophe. for europe, this is an important question. you see the banking systems are in general more national than they were. not in portugal, but in many countries. the banks, even when they have subsidiaries, are tending to manage by way of separate entities more and more. banks today are exposed to country risk because most of the assets are related to the country. this means that, if you have a shock in the country, the banking system is not diversified enough. of course, the fact that we are in a monetary union limits the room for manoeuvre : you don ’ t have the exchange rate instrument, you have a single monetary policy. so it is absolutely vital to evolve towards pan - european banks, banks that are geographically diversified and also that would be backstopped by emu as a whole. so what you are saying is that, in a monetary union, if small countries want to have safe banks, they have to forget the ownership question? i think what matters in banks is good governance, not national ownership. you can always have local banks, that ’ s not the problem, but having the whole banking system exposed to the local economy in a monetary union like ours is a dangerous combination. we have two problems in the euro area : a fragmented banking market and the lack of common backstop. it cannot be done in one day, but you have to spell out how you make the transition to it