BdP. IL seeks international public tender for governor

IL proposes that the governor of the Bank of Portugal be chosen through an international public competition, rather than by the Government, and that the position cannot be held by anyone who has held government office in the previous three years.

A bill of this nature had already been presented by the IL in the last legislative session, but ended up not being voted on or debated due to the dissolution of the Assembly of the Republic and the calling of early legislative elections.

According to the party, this bill will be presented to the President of the Republic, Marcelo Rebelo de Sousa, at the hearing that the new IL leader, Mariana Leitão, will have this afternoon at the Belém Palace.

In the explanatory memorandum of the diploma, the IL considers it important to ensure “the independence of the management of the Banco de Portugal (BdP) from the Government” and the “quality of the members of its management bodies, ensuring that they are fully suited to the exercise of their functions”.

The party emphasizes that, currently, both the governor and the remaining members of the BdP board of directors are appointed by the Government, " after a proposal from the Minister of Finance and a non-binding opinion from the Assembly of the Republic ."

"It is important to strengthen the nomination process by creating a BdP body to assess the suitability of candidates, also reinforcing the independence of candidate proposals," the party argues.

IL therefore proposes that the BdP begin selecting "candidates through an international public competition ", promoted by a new internal body, called the Ethics, Appointments and Remuneration Council, which would replace what they say is "the despised Remuneration Committee, which has not met for more than a decade".

The purpose of this proposal, according to the party, is to ensure that the choices fall to “people eminently qualified for the position and free from conflicts of interest.”

In the bill, the IL thus suggests changes to the BdP's organic law so that it is stipulated that the governor "is appointed by resolution of the Council of Ministers, on the proposal of the Ethics, Appointments and Remunerations Council, accompanied by an opinion on the suitability of the person to whom it refers, after a reasoned opinion from the competent committee of the Assembly of the Republic".

The remaining members of the BdP's board of directors would be appointed by the Council of Ministers, but proposed by the bank's governor, with the opinion of the Ethics, Appointments, and Remuneration Council. Unlike the BdP governor, they would also have to undergo a parliamentary hearing before being selected.

Regarding the composition of the new Ethics, Appointments and Remunerations Council, IL proposes that it be composed of three members, “appointed by the member of the Government responsible for the area of finance, on a proposal from the Audit Board of the Bank of Portugal and following the opinion of the competent committee of the Assembly of the Republic”.

In addition to changes to the selection method, the IL also proposes changes to the exclusion factors for senior BdP officials, so that the impediment now applies to people who, "in the three years prior to appointment, have held national government functions."

IL justifies the need for this measure by specifically addressing the case of Mário Centeno, current governor of the BdP and former Minister of Finance of the Socialist Party, considering that there is a flaw in the law when “people with management responsibilities or shareholder responsibilities of entities supervised” by the bank in the last three years are excluded from their positions, but those who supervised the area are allowed to do so.

"In this bill, we also propose that this aspect be corrected to ensure a balance of exclusion factors regarding potential conflicts of interest," the party states.