Portugal’s Finance Minister Maria Luís Albuquerque has created her own, rather wonderful fairytale around the collapse of BES and the failure of the regulators.
Believing every word of her carefull prepared version of events, the minister informed representatives from the Central Banks of the world's Portuguese speaking countries that the BES case showed that the financial system in Portugal is "more robust and ready."
The finance minister admitted that the problems at BES had increased the risks and challenges to the financial system but the way this particular case had been handled showed a "more prepared and more robust" system.
Maria Luís Albuquerque was speaking during the XXIV Lisbon Meeting of the Central Banks of Portuguese Speaking Countries, whose delegates will be grown up enough to make up their own mind as to Portugal's handling of the BES collapse.
Albuquerque said that she did recognise that a sustained effort is needed to ensure the stability of the financial system, but all is well as the BES case showed a system that was "more prepared and truly integrated into the new robust European regulatory model."
The minister highlighted the need to ensure the soundness of the financial system, considering that this is of the utmost importance and is fundamental to the stability of the economy.
The response to this series of truisms was not recorded but the version of reality given by Albuquerque, who worryingly appears actually to believe much of what she is saying, differs to the state of affairs Portugal has had, and continues to maintain.
The central bank has had no senior changes and is as ill-prepared for the next financial collapse as it was the last. It mishandled the BES collapse by shovelling taxpayers’ money at the problem without telling anyone and now seeks to sell of its bastard child, Novo Banco, to the first person through the door wearing a suit and with a cheque that won’t bounce.
There have been no legislative changes to stop crooks and money launderers like Ricardo Salgado and the city sees a ‘business as usual’ sign over the Bank of Portugal’s front door.
Comments
Portugal is still in the EU because the alternative for Portugal and for the EU is so much worse. If the Union begins to unravel, the euro will be ditched and we shall revert to the mini-states of yesteryear.
There are plenty of problems with the euro, with the EU and with Portugal. At present, they are still working, and I hope that they continue to work for the sake of an aging population (including me).
For one solution, how about a devaluation of the euro? This would lead to more expensive Chinese imports, and cheaper exports of whatever it is that Portugal exports (is it only cork and sardines?). At a stroke, everyone´s debts would reduce, and it might even lead to more British holiday-makers in the Algarve.
The following quote being fundamentally relevant to all things Portuguese in their presumably genetic inferiority to the British.
Adhemar : You have been weighed, you have been measured, and you have been found wanting. In what world could you possibly beat me?
A Knight's Tale (2001)
http://www.imdb.com/title/tt0183790/quotes
But the nightmare continues - the eurozone still not nearly recovered. The feedback and assessment on bank 'strength tests' not yet done. The uncertainty affecting some of the strongest economies in the world including ... (ahem - cough modestly) the UK's.
Europe could still slip back into the abyss ... because of contagion from joke bank regulation of BES / GES in Portugal.
So - having failed repeatedly - why are they still in the EU ?
film "Wall street"
"illusion has become reality"