<![CDATA[ Mário Centeno diz que procrastinação é "problema da maior parte das crises financeiras" ]]>

The governor of the Bank of Portugal (BdP), Mário Centeno, considered, this Tuesday, that the procrastination of European and national authorities in acting in certain contexts was responsible for some of the financial crises.

"In finance there is no luck or bad luck, there is only procrastination. When we don't do things when we need to do them, we are always unlucky, and the problem with most financial crises - and from which, unfortunately, Portugal has not escaped - was precisely that: procrastination", said the former Finance Minister in the Budget, Finance and Public Administration Committee.

The point was made before the deputies to justify the context in which the contingent capitalization agreement (CCA) was structured for the purchase of Novo Banco by the Lone Star fund, in 2017, and in which the Portuguese banking system found itself.

Mário Centeno pointed out that at the end of 2015, around 75% of Portuguese banking deposits "were in institutions that were either resolved, on the way to resolution, without capital or that did not have business plans compatible with their survival as banking institutions".

The situation, which he said was unsustainable for a modern economic growth model, meant that the banking system in Portugal was "inoperative from a strategic" and operational point of view.

The current governor of the BdP pointed out that it was in this context that the Resolution Fund (FdR) gave a "very complex" response in a resolution that was "quite experimental" from an economic and financial point of view.

Still, he stressed that the decision had a legal and legal framework -- supported by court decisions.

The existence of the CCA was also justified by the imposition of a deadline by Brussels for the sale of Novo Banco within two years, but also by the lack of conditions to renegotiate with Brussels the conditions agreed in 2014, when Banco Espírito Santo (BES) fell.

In the governor's view, the existence of the deadline implied that, if it failed, there were only two options: either liquidation of the bank, or, if the European authorities allowed it, a new resolution.

"We have learned, over time and with great difficulty, that renegotiating is much more difficult than negotiating, because renegotiating forces us to review all the premises with which we initially entered into a process, most of the time, like these, because we were not in a position to fulfil the commitments we had made", he added, noting that "acting late is the best sign of difficulties" in the future.

Mário Centeno also ruled out that a resolution process is "a flower garden".

"We will have to be very humble and try to understand the moment in which each thing is being done so that we can understand what we can still do on top of that something," he said.

The head of the banking regulator recalled the parliamentary hearing he attended in April 2017, when he was still a minister and the CCA had not yet been concluded, and in which he mentioned that in his speech he "mentioned the word risks a dozen times".

"Nobody hid from anyone what was at stake at that time, and it is very simple to understand why: because the problems were in Novo Banco's balance sheet. That was why it was not sold in August 2015, that was why it was necessary to find a mechanism (...) that could accommodate that sale", he added.

Centeno rejected a personalization of the CCA and noted that this was done with the help of entities such as the European Commission, the BdP, the Ministry of Finance, the Single Supervisory Mechanism or the European Central Bank (ECB).

Without this CCA, the governor believes that "the sale of Novo Banco would not have taken place".

"There is neither praise nor self-praise. It is an enormous effort of commitment by the Portuguese Republic that was fulfilled and that was anticipated", he said.

Regarding the early end of the CCA, announced at the beginning of December by the bank to the Securities Market Commission (CMVM), Mário Centeno argued that it could have been brought forward "much further in time".

"I can give you this opinion of mine: it could have been brought forward much further in time. The mechanism could have been closed, and it was perhaps desirable for the Portuguese banking system and even for the Novo Banco institution that this had happened", he said.

The governor pointed out that, despite being controlled, the mechanism could have been "more controlled", but noted that "no instrument created in the financial sector with State intervention in Portugal" had the same number of audits as the CCA.

Mário Centeno also said that from the moment that FdR injections ceased to exist in Novo Banco, there has been a positive contribution to the public accounts, in the order of 250 million euros -- the contributions paid by banks to the fund.

For the future, Centeno noted the possibility of a change in the reimbursement of FdR loans to the State, but postponed it to the future.

"We anticipate that this increase in banking results is temporary, it is cyclical, and that this cycle will then converge to lower values ​​in banking results. The future will tell how this evolution will unfold. I would say that, at that time, it was a better time to change the balance we have today", he stated.

The CCA was negotiated during the process of purchasing Novo Banco by the Lone Star fund in 2017, and it was under this that the Resolution Fund injected more than 3 billion euros into the bank.

The early termination of the CCA agreement is expected to have an impact of 62.7 million euros on the institution's results, which will now also be able to distribute dividends, as indicated by the financial institution in a statement sent to the CMVM on December 9.