João Costa Pinto says he has no memory of credit alerts being taken to BOP meetings – Jornal Econômico

BE questions EY on credits approved on the basis of "market competition" despite negative opinions - The Economic Journal


"I have no memory, and it is not for lack of it that such a question [relativa a desconformidades de crédito na CGD] has been taken to a meeting of the board of directors of the Bank of Portugal, "said João Costa Pinto to the deputies of the II parliamentary inquiry committee (CPI) to the recapitalization of CGD and the management of the bank they are hearing on Wednesday, 10 in April, the former chairman of the audit board of Banco de Portugal (BdP).

João Costa Pinto's response was given to the Socialist deputy, João Paulo Correia, who questioned the chairman of the BOD's audit board between October 2014 and May 2018 on whether the topic Caixa Geral de Depósitos was ever brought to the boards of directors of the BOP, where Costa Pinto participated, namely the alerts of the quarterly reports of the audit committee of the public bank that were sent to the regulator, reporting on "non-compliance with the credit monitoring policy" in CGD.

João Costa Pinto, who was responsible for the "secret" report on the performance of Carlos Costa and the supervisor in the case of BES, which is requested by the PS and Bloque de Esquerda, also stressed at the hearing: "as far as I am aware of the nature of the problems for credits [na CGD], it is mainly by the press. "

It is recalled that blocs and socialists intend to analyze faults of the supervisor in the BES case that could be extended to CGD, requiring the PS the secret report to evaluate CGD's exposure to BES.

On this presentation, MP of the PS, João Paulo Correia, questioned the former chairman of the Board of Auditors of the Bop as to whether that secret report has any chapter of what was the GES / BES exposure to other banks, namely CGD, or through actions , bonds and loans granted, upon the resolution of BES.

"It was not the subject of the independent commission (which evaluated the BOP's action in the BES case). Neither was this subject of concern, so it is not reflected in the report, "said João Costa Pinto.

The conclusions of the document, about 600 pages, point to criticisms of the performance of the current governor of the Bank of Portugal, Carlos Costa, but also of the former, Vítor Constâncio, in relation to the Espírito Santo family bank that came to be the target of a resolution in August 2014.

This is one of the documents that both the Socialists and the blockers asked to have access under the new CPI to CGD, created after the disclosure of the audit report of EY to the management of the Caixa between 2000 and 2015, which concluded for losses of 1,647 million 18 credit operations that turned out to be ruinous. This report has also been requested in court by former bank leader Ricardo Salgado.

In early March, the JE reported that the PS joined BE in the request of the internal report that evaluated the performance of the Bank of Portugal in the BES case. While blockers want to analyze supervisor failures that could be extended to CGD, the Socialists require a secret audit to assess CGD's exposure to BES.

The parties, like the CDS, want access to the internal report that evaluated the supervisor's action in the BES case to confront the BOP governor in the new CPI to the management of the Caixa who intends to go further than the previous one in the facts which caused losses of millions of euros in the public bank.

For BE deputy Mariana Mortágua, this report is fundamental for the Parliamentary Commission of Inquiry to carry out an integrated evaluation of the performance of the Bank of Portugal in the financial system. "In addition to the retrospective analysis, it is important to assess whether there has in fact been a change in practices on the part of the regulator, as a result of the experience gained in past cases", justifies Mrs Bloquista in her request for a secret report.

The Socialists also included this secret report in the list of documents requested by the party, handed over to Parliament under the new CPI to the Caixa. According to the deputy of the PS, João Paulo Correia, justified to the JE, the objective is to "gauge CGD's exposure to BES".

Even before the resolution of BES, on August 3, 2014, it was reported that CGD's exposure to companies owned by the Espírito Santo Group was around 300 million euros, but all credits had real guarantees such as shares or real estate. Among the companies that were financed with CGD was Espírito Santo International, which controlled the Espírito Santo Financial Group (ESFG), then BES's largest shareholder, and in the meantime, both companies had been declared insolvent.

The secret report was requested by the BES parliamentary inquiry committee that the supervisor did not want to hand over in 2015. It was again requested the following year by leftist deputies in the Banif case inquiry commission, but the document that was prepared by the Bank of Portugal's evaluation and decision-making committee for the supervision of BES, with the technical support of consulting firm Boston Consulting Group (BCG). Now, in the new committee of inquiry to CGD, Parliament again requested the report from the BOP and obtained a new refusal to hand over the document that risks never seeing the light of day.

The BOP argued in 2016 that it does not have to make available "information or documents whose content has no connection with the resolution measure" and therefore considered them subject to "professional secrecy". An argument that will now be more difficult to use in the face of the new banking transparency law, which will oblige banks to send information under bank and professional secrecy to the commissions of inquiry and should be useful to the new CGD management inquiry.

It should be recalled that the law governing the disclosure of large bank borrowers and strengthening parliamentary control in access to banking and supervisory information provides for "access to information by parliamentary inquiry committee" on "transparency on capitalization operations of institutions public funds "and" collection and communication to the Assembly of the Republic of relevant information ".

In other words, the new law specifically provides for the Banco de Portugal to exchange information in the context of parliamentary inquiries whose purpose is specifically to investigate or examine the actions of the authorities responsible for the supervision of credit institutions.

After further refusal, CDS insists on secret report

At the hearing Carlos Costa, governor of the BdP and former CGD administrator, on March 27, the CDS-PP once again requested a secret report on the governor's performance in the BES case, after the supervisor refused for the third time his to Parliament now under the new commission of inquiry into Caixa.

João Almeida, a member of the CDS-PP and rapporteur for the new commission of inquiry into Caixa, requested that the secret report be submitted to Parliament on the performance of Banco de Portugal in the case of BES, whose delivery was refused again by the supervisor claiming "professional secrecy" and that the document is not intended for the purpose of the new commission: the Recapitalization of Caixa Geral de Depósitos and the Bank's Management.

"As rapporteur, I would ask that the internal evaluation report on the action of the supervisor in the BES case be submitted to this committee, following the response of the Banco de Portugal that this report is kept under professional secrecy and that it has no relationship with the purpose of this commission, "said João Almeida before the start of the second hearing to the governor of the BOP, Carlos Costa, in the II CPI to CGD.

According to the centrist deputy, "the argument under the banking secrecy does not reap", since, he recalls, still "yesterday, EY confirmed that Banco Espirito Santo (BES) is the national financial group flagged in the audit of Caixa's management between 2000 and 2015, as responsible for losses of € 519 million from the CGD group in 2014 and 2015 (€ 348 million in 2014 and € 171.5 million in 2015).

This is the third time that the entity led by Carlos Costa refuses the delivery of the report that had the technical support of the consultantBCG and has more than 600 pages, and that points very critical conclusions to the action of Carlos Costa that never were revealed. What happens after I have already been refused Parliament twice on other committees of inquiry.

The BES's self-assessment in the BES case leaves criticisms of the supervisor's actions and points out failures in the follow-up done to the bank, he told Jornal Econômico source close to the process, confirming the doubts left by the internal evaluation committee, reported by Jornal de Negócios March 23, 2016, when he reported that the report known as Costa Pinto, inheriting the name of the chairman of the audit board of the governor that led it, goes until the beginning of the last decade.



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