I missed very little to the left parliamentary majority to force the banks to pay part of the home loans to customers. He missed little, but now a long way. A letter from the Governor of the Bank of Portugal to the Minister of Finance, asking for new legislation that would prevent the rates fall below zero (dated April 5), and dissemination of data on the high losses for banks that the possibility would entail , cut margin to PS parliamentary group to maintain the original version of a bill on the matter.
the proactive initiative of Carlos Costa, while also calling for an end to the use of Euribor futures contracts, proposing the creation of a new rate calculation formula (to be determined from the average of the rates of deposits), which will be necessarily higher, will be able to lock the joint proposal of the parliamentary groups of the PCP and the Bloc, the PS blew, and the author of the final wording.
This wording required the full implementation of the Euribor rate, currently negative, even after canceled the spread (commercial bank margin), which would require the payment of capital by financial institutions. PUBLIC had information that could not officially confirm that the European Central Bank itself will have striven with the national authorities that the diploma was caught.
There is no indication that the minister Mário Centeno abide in soon, the recommendation of the governor, but the possibility of accepting the governor’s suggestions, which also wants the spread or commercial bank margin remains unchanged, unlike the current situation, penalizing future loans , does not cease to act as a disincentive to more radical changes.
Speaking to PUBLIC, the deputy BE, Paulino Ascension, admitted that the chances of the bill maintain the previous version are now “fairly minor “. But the deputy João Paulo Correia, the PS, who left the decision to postpone the vote on the final text, said that the issue will have to be reviewed, stressing that the proposals are the CFP and the BE.
but there will remain doubts about this retreat, because the delay in diploma vote was justified by the PS with the need for “further assessment” of the change impacts. The hardness of the figures given by Governor Carlos Costa on hearing Thursday on the Budget Committee and Finance and Administrative Modernization (COFMA) leaves no room for doubt.
In response to a request from COFMA presided by Teresa Leal Coelho, the PSD (party along with the CDS voted against the proposals of the left), Carlos Costa shot with a more dramatic scenario losses for banks if the Euribor accelerate the fall. From the fall of the Euribor six months to -1%, a scenario that seems unlikely at this point (the rate is -0.142%), the impact on net interest income of banks amount to 700 million euros per year.
Limiting the fall in the interest rate to zero (as being the current practice), the impact of 1% would be 500 million euros, advances the supervisor. Applied the current drop in the Euribor impact for banks is much lower. In the fourth quarter of 2015, the balance was still positive for the credit institutions.
Underpinning the proposal of Carlos Costa in the letter of 5 April, the alternative to limit only the reference rate (Euribor) to zero (keeping the collection of the spread of the value), there would be no impact on net interest income of the banks, the document said. But this would apply only to new contracts, since, according to a circular letter from the Bank of Portugal, in March 2015, the negative value of the Euribor will have to be put down to the spread .
the regulator has referred also to other negative impacts, but in this case for customers, the level of compensation of the deposits, which can not be negative, and the reduction of financing the economy.
at various times, the governor said that if the bill under discussion in the Parliament implies in practice the negative impact of Euribor without limit “is the stability of the financial system and the financial intermediation function of banks that are put concerned. “
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