“Bank bank”. After all, what does Banco de Portugal do?

O Banco de Portugal (BdP) is the central bank of the Portuguese Republic and has two main functions: maintaining price stability and promoting the stability of the financial system, explained the Government under the heading Finance to Lupa. 

“ Founded in 1846, Banco de Portugal is one of the oldest financial institutions in the country, having undergone several changes throughout its history, including the passage from the private sphere to the public and the increase in the number of competences and assignments,” the Executive explains. 

For the two main functions, the Government explains what is at stake: 

“ The first function, this is carried out within the framework of the European System of Central Banks (ESCB) and under the responsibility of the European Central Bank (ECB), responsible for defining the single monetary policy, in particular for changes in the key interest rates. The Governor of Banco de Portugal is called to participate in the meetings of the Governing Council, contributing to the decisions that are taken there”, it can be read. 

For thesecond function, Banco de Portugal acts as a national macroprudential authority, identifying and evaluating the risks posed to financial stability and adopting measures to prevent, mitigate or reduce these risks, with the aim of strengthening the resilience of the financial sector.”.

“The Bank of Portugal is also working in cooperation with the ECB on the management of the country’s reserves in euro, foreign currency and gold, as well as issuing euro banknotes and putting into circulation the coins authorised by the ECB”, can also be read on the Government’s website. 

Banking supervision

The government explains that this is “a recent function” and that, “despite the informal status of ‘Bank‘, only after the Carnation Revolution did this institution see its recognised status formally and fully, through the Organic Law published in 1975′′.

“ Thus, currently, Banco de Portugal regulates and supervises credit institutions, financial corporations, payment institutions and electronic money”, is also mentioned. 

More: “In a situation or risk of insolvency, it is also up to Banco de Portugal, within the framework of the Single Resolution Mechanism, to ensure the orderly resolution of banks, with a view to protecting bank customers and the stability of the financial system.”.

The Executive also stresses that Banco de Portugal “regularly produces studies and analyzes on the national and international economy and on the portuguese public finances, also acting as national statistical authority“.

In addition, “through its Governor and Vice-Governor, it is also up to the institution to represent the country in various international bodies, such as the International Monetary Fund (IMF), an institution geared towards the stability of the international monetary and financial system”. 

“ As a national central bank, Banco de Portugal is a public entity, wholly owned by the Portuguese State, endowed with administrative and financial autonomy and its own heritage, in accordance with the provisions of the European Treaties”, it is further explained.

More: “The Banco de Portugal is managed by a Board of Directors, led by the Governor. The members of the Management Board shall be appointed by the Government, on a proposal from the Minister for Finance, and after obtaining the opinion of the Assembly of the Republic”.