Spain 
Italy 
Greece 
Carlos Costa Corrects Interpretations of Comments on Proposed Platform
29 September 2017
The governor of the bank of Portugal sent a note to reporters clarifying that “the proposed solution is the banks’ responsibility and corresponds to one of the routes recommended by the Bank of Portugal.”
The governor of the Bank of Portugal warned that if the Portuguese banking system were to resort to “any model of externalisation of the sale of non-income generating assets,” that it would be heavily penalised. But Carlos Costa was not talking about the new platform to solve the problem of bad credit in banks, that will be created by the end of the year, as interpreted by the Lusa Agency. Rather, he was referring to “appreciation of NPLs” and the possible creation of a ‘bad bank.’
Carlos Costa, who spoke on Thursday at the Medina Carreira Tribute Conference, held at the Calouste Gulbenkian Foundation in Lisbon, explained that “one of the issues that significantly distinguishes the countries that participate in the European Union’s banking union is the effectiveness of the system in the matter of defaulted loans.” He added: “This will be one of the factors that will surely penalise the Portuguese banking system if it has to resort to any model of externalisation of the sale of non-income generating assets.”
Hours later, Banco de Portugal sent a note to reporters explaining that the governor, in these statements, referred to “the appreciation of NPLs, and had nothing to do with the proposed platform.” The same note also added that “Banco de Portugal considers that the proposed solution is the banks’ responsibility and corresponds to one of the routes recommended by the Bank of Portugal.”
The proposed platform aims to reduce to a third, six months, the average time required to restructure non-performing loans. The platform will only manage loans of more than five million euros at an early stage, and will only finance viable companies with loans linked to BCP, Novo Banco and Caixa Geral de Depósitos.
Original Story: Economia Online – Mónica Silvares
Translation: Richard Turner