A report compiled by researchers from Lisbon’s ISEG business school claims Portugal’s politicians are much too chummy with the banking sector.
It’s a form of “excessive association” that actually compromises banking supervision, say investigators Tiago Cardão-Pito and Diogo Baptista.
The duo have been analysing the performance of the Portuguese banking sector since the country joined the euro in 1999.
One of their conclusions is that “in the early years” there were “very dangerous banking cycles” that tended to create banking crises themselves.
The findings come hot on the heels of outrage that career politician Durão Barroso has been able to shimmy into a top job with investment bankers Goldman Sachs – an organisation whose dealings have been seen as a major trigger for the 2008 financial crisis – and not long after the controversy over former finance minister Maria Luís Albuquerque joining Arrow Global for four days’ work a month on a salary of €100,000 Click here.
Expresso explains that the ISEG report argues these kind of situations “do not allow a perimeter of sufficient safety nor the necessary distance to guarantee a critical, independent and challenging enough vision of realities”.
“We have a degree of proximity for example between politicians who should be supervising the banking sector who come directly from it, or return there later,” Cardão-Pito added, stressing that this ‘interlinking’ increases the probability of crises, as supervision simply is not sufficiently rigorous.
The report is clearly treading on eggshells, with the spectre of BES hanging in the shadows.
But for anyone who likes to call a spade a shovel, it is more than clear.
Cardão-Pito concludes with diplomacy: “Perhaps there is too much proximity for what should be demanded in terms of independence between one sector and another.”
natasha.donn@algarveresident.com
