New Bank: “CGD may lose ‘taxpayers too – TVI24

New Bank: "CGD may lose 'taxpayers too – TVI24

Like all other banks included in the Portuguese financial system and triggered the resolution fund to solve the problem of BES, the CGD, which belongs to the state, is also subject to losses. This was even admitted this Wednesday by Finance Minister in Parliament. Now, CGD is a public bank. If the sale of New Bank if it loses money, it also penalizes taxpayers.

“Objectively, CGD can withstand this loss. If you participate in the system with the same rules as all other banks, is subject via the resolution mechanism to take a loss, “said Maria Luis Albuquerque, the budget and finance committee, which is being heard for the first time on this subject. “As is subject to having a gain”, was keen to highlight.

In the limit, these losses will therefore be borne by taxpayers. The Government said, several times, that would not be the taxpayers to bear any losses from the New Bank. For the first time, albeit indirectly, Maria Luís Albuquerque admitted that this can happen.

Basically, it all depends on “the result of the sale of New Bank”. Anyway, the minister insisted that the activation of the Resolution Fund was “the best solution” among possible. “He kept to the last minute the possibility of a private capitalization, it was the best solution.” Not proved possible, and that’s why chose other routes.

Maria Luís ensures that “it was decided, as a major policy decision, that there was no involvement of taxpayers ‘decision’. The Box is a state bank, but has the capacity, according to the minister, to bear ‘losses’.

“It is price of having a public bank. The state is a shareholder “, he recalled, saying it will meet the same impacts, whether good or bad, the other banks.

Finance Minister understands that “this whole discussion seems from a point that alternative was not there problem. This alternative does not exist. The problem was there. We can not be eternally discussing drawbacks of the solution. ” But look at it from the front, defending.

admitted that the measure “is not ideal” but “only applies when there are better alternatives.” In his view, the market realized what he was concerned, an ‘idiosyncratic issue’ and not solvency. “Do not disturb public debt ‘, noted also

That is, despite the risks – and one of them will be the loss potential borne by CGD and therefore taxpayers – Luís Maria has no doubt that «this is the solution that best safeguards the public accounts.”

Who runs the bank? is not the state, guarantees. It is the resolution fund, a “process led by the Bank of Portugal, the Government follows.” But only that: “The State is a creditor of the resolution fund. It is not a shareholder of the new bank. The resolution fund is fed by financial institutions that form the background of Portuguese resolution, which can also be powered by loans’. So it is that “does not have to stay forever treasure the lender.” There, according to the minister, other routes.

/> Responding to Mr Michael James PCP, who accused the minister of having a dogmatic view the sale of the bank, Luís Maria replied: “Do not crystallized dogma the sale, but it follows necessarily that form the legal framework. It is not a dogma. Dogma is find that banks can not be private. This is a dogma that is . ”

The minister also added that Benedict met with Victor and his team, not to decide on a model, but to clarify this point: ” What made this meeting was to explain to the doctor that Vítor Bento aid rules of the state had changed. There was no proposal on model, or reject the model. It was just clarifying the modalities available in terms of the framework of the law. ”

“When will the government decide the model,” said the minister, later to be assertive in response: “Never Mrs,” said Mariana Mortágua, the Left Bloc, which had made this question. Is the Bank of Portugal that bears this responsibility, he fired.

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