At the Money Conference in Lisbon today, the subject of banking sector regulation was addressed in speeches by the President of APB, Vítor Bento, and the Deputy Governor of the Banco de Portugal, Clara Raposo.
Vítor Bento voiced concerns that both European and Portuguese regulatory demands on Portuguese banks are excessive, adversely affecting their competitiveness compared to their peers and other financial sector operators.
The President of the association representing major banks argued that excessive regulation and bureaucracy harm “competitiveness and social welfare” and promote a “culture of excessive risk aversion.”
He criticized the imposition of “punitive demands” such as contributions to the Resolution Fund, in addition to the European Resolution Fund, as well as taxes on the sector.
Bento also mentioned that risk weighting for the assets of Portuguese banks requires them to reserve more capital. He suggested this indicates that “the capital of Portuguese banks is valued less by European regulators than that of banks from other countries.”
The banking association leader insisted that to attract investors, this capital “needs to be well managed, with profits.”
Conversely, the Banco de Portugal emphasizes that regulation and supervision have “enabled banks to be more resilient” and better prepared for potential crises.
Clara Raposo, Deputy Governor of the BdP, noted that the current results of banks demonstrate their ability to manage demands while generating profits.
Regarding the current situation and banking profits, Clara Raposo highlighted the importance, amidst present uncertainty, for banks to “wisely invest the accumulated profits from recent years.”
She also advised entities to “maintain prudence in forming impairments and preserving capital,” especially given the anticipated reduction in profits due to the continued gradual decline in interest rates.
