Banco de Portugal

Banco de Portugal is Portugal's national central bank and a public institution responsible for central-bank, supervisory and financial-stability functions. It was created by royal charter on 19 November 1846 during the reign of Queen Maria II. The institution resulted from the merger of Banco de Lisboa, Portugal's first bank, with Companhia de Confiança Nacional, an investment company that specialized in financing public debt. At its creation, Banco de Portugal operated both as a commercial bank and as an issuer of legal tender. The bank initially issued the Portuguese real. Following the establishment of the Portuguese Republic in 1910, it became the issuer of the escudo, which remained Portugal's national currency until the country's transition to the euro. Banco de Portugal stopped issuing escudo banknotes and coins in connection with euro adoption, completing the changeover in 1999. Since then, its monetary role has been exercised within the Eurosystem, with the European Central Bank responsible for the single monetary policy of the euro area and national central banks contributing to its implementation. Banco de Portugal was nationalized in September 1974, following the Portuguese Revolution, and its 1975 Organic Law gave it explicit responsibility for supervising the banking system. Its role subsequently expanded beyond currency issuance and monetary operations. Today, it contributes to the stability and functioning of Portugal's financial system, supervises banks and other regulated entities within the applicable Portuguese and European frameworks, and supports the implementation of European banking policy. The bank is Portugal's national competent authority within European Banking Supervision, the supervisory framework operated through the European Central Bank and the Single Supervisory Mechanism. It is also a voting member of the Board of Supervisors of the European Banking Authority, Portugal's designated national resolution authority, and a plenary member of the Single Resolution Board. In addition, it participates in the European Systemic Risk Board and the wider European System of Central Banks. Its responsibilities include contributing to monetary-policy implementation, managing and distributing euro cash in Portugal, collecting and publishing economic and financial statistics, supporting payment-system oversight, supervising credit institutions and other entities within its mandate, and taking part in crisis-management and bank-resolution arrangements. The institution maintains its headquarters in Lisbon and has branch offices in Castelo Branco, Coimbra, Évora, Faro, Funchal, Leiria, Porto and Viseu. Banco de Portugal also has a cultural and research role. In 1932 it established the Biblioteca do Banco de Portugal, which became a significant Portuguese private library. Its institutional history includes a major accumulation of gold reserves beginning in 1957, a policy that contributed to Portugal's large national gold holdings. The bank's governance is headed by a governor. Since 1887, the governor has led the administration; governors are proposed by the finance minister and appointed by the Portuguese cabinet for five-year terms, with the possibility of one reappointment.

Banco de Portugal was established on 19 November 1846 by royal charter issued under Queen Maria II. Its creation combined two existing financial institutions: Banco de Lisboa, regarded as Portugal's first bank, and Companhia de Confiança Nacional, an investment company focused on public-debt financing. The new institution was intended to function as both a commercial bank and a bank of issue. The Portuguese Crown designated it as an issuer of legal tender, and it initially issued the Portuguese real. The political transition from monarchy to republic altered the institution's currency role. After the Portuguese Republic was established in 1910, Banco de Portugal began issuing the escudo. The bank remained central to the country's monetary and financial system throughout the twentieth century. During the Estado Novo period, it pursued an active gold-acquisition policy beginning in 1957. That accumulation helped leave Portugal with one of the world's largest official gold reserves. Banco de Portugal also developed institutional and cultural functions. In 1932 it created the Biblioteca do Banco de Portugal, which became one of Portugal's notable private libraries. In 1946, the institution received the Grand Cross of the Order of Christ from the President of Portugal. A decisive institutional change followed the Portuguese Revolution. Banco de Portugal was nationalized in September 1974. Its Organic Law of 1975 assigned it responsibility for supervising the banking system, establishing a formal supervisory role that complemented its traditional monetary and issuing functions. Over subsequent decades, banking supervision and financial-stability responsibilities became increasingly integrated with European regulatory frameworks. Portugal joined the European monetary project, and Banco de Portugal became part of the European System of Central Banks when that system was established in June 1998. With the adoption of the euro, the bank ceased issuing the Portuguese escudo in 1999. Its monetary activities thereafter took place within the Eurosystem, alongside the European Central Bank and the other national central banks of the euro area. In the contemporary European framework, Banco de Portugal acts as Portugal's national central bank and as a key financial authority. It is the national competent authority for Portugal within European Banking Supervision, participates with voting rights on the European Banking Authority's Board of Supervisors, and serves as Portugal's designated national resolution authority. It also participates in the plenary session of the Single Resolution Board and is a member of the European Systemic Risk Board. The institution maintains its main base in Lisbon and branch offices in Castelo Branco, Coimbra, Évora, Faro, Funchal, Leiria, Porto and Viseu. Its governor leads the administration; since 1887, the governor has been the central executive office of the institution. Governors are proposed by the finance minister and appointed by the Portuguese cabinet for five-year terms, with one possible reappointment. In addition to monetary and supervisory work, Banco de Portugal publishes statistics and economic analysis, supports the operation of payment and cash systems, and contributes to public understanding of Portugal's financial system.

• 2014

  Banco Espírito Santo is restructured

  [1]Banco de Portugalen.wikipedia.org

  Banco de Portugal announces a restructuring that separates Banco Espírito Santo's viable operations from its residual assets and liabilities.

• 1999

  Escudo issuance ends with euro adoption

  [1]Banco de Portugalen.wikipedia.org

  The bank ceases issuing the Portuguese escudo as Portugal adopts the euro.

• 1998

  Joins the European System of Central Banks

  [1]Banco de Portugalen.wikipedia.org

  Banco de Portugal becomes an integral part of the European System of Central Banks.

• 1975

  Banking-supervision mandate is formalized

  [1]Banco de Portugalen.wikipedia.org

  A new Organic Law makes Banco de Portugal responsible for supervision of Portugal's banking system.

• 1974

  Nationalization

  [1]Banco de Portugalen.wikipedia.org

  Banco de Portugal is nationalized in September after the Portuguese Revolution.

• 1957

  Gold-acquisition policy begins

  [1]Banco de Portugalen.wikipedia.org

  The bank begins a vigorous policy of acquiring gold, contributing to Portugal's substantial official gold reserves.

• 1932

  Institutional library is established

  [1]Banco de Portugalen.wikipedia.org

  The bank establishes the Biblioteca do Banco de Portugal, later recognized as a significant private library in Portugal.

• 1910

  Escudo issuance begins

  [1]Banco de Portugalen.wikipedia.org

  Following the establishment of the Portuguese Republic, Banco de Portugal becomes the issuer of the Portuguese escudo.

• 1846

  Banco de Portugal is founded

  [1]Banco de Portugalen.wikipedia.org

  A royal charter dated 19 November creates Banco de Portugal through the merger of Banco de Lisboa and Companhia de Confiança Nacional.

A public central bank serving Portugal while operating as part of the Eurosystem and the broader European financial-supervision architecture.

• Central banking

  Central-bank monetary operations

  Banco de Portugal conducts national central-bank functions within the Eurosystem. Its role includes implementing the common euro-area monetary policy framework, participating in liquidity operations and supporting the transmission of monetary policy to Portugal's financial system.

• Currency and payments · 1999

  Euro cash services

  The bank supports the issuance, circulation, quality control and distribution of euro banknotes and coins in Portugal. This function replaced its former role as issuer of the Portuguese real and escudo.

• Financial supervision · 1975

  Banking supervision

  Banco de Portugal supervises banks and other regulated financial entities within its national and European mandates. It operates as Portugal's national competent authority in the European Banking Supervision framework and applies or supports policies established at European Union level.

• Financial stability

  Bank resolution

  As Portugal's designated national resolution authority, Banco de Portugal participates in the planning and execution of measures designed to manage failing banks while protecting financial stability and maintaining critical functions. It works within the Single Resolution Mechanism and participates in the Single Resolution Board's structures.

• Public information

  Economic and financial statistics

  The bank collects, produces and publishes monetary, financial and economic information relevant to Portugal. These statistical and analytical activities support monetary-policy implementation, supervision, financial-stability assessment and public knowledge of the economy.

• 2014

  Resolution of Banco Espírito SantoOther

  Background

  Banco Espírito Santo, then Portugal's second-largest bank, faced severe financial problems requiring regulatory intervention.

  Action taken

  Banco de Portugal announced a restructuring that separated the bank's viable business into a new institution while leaving residual assets and liabilities in the legacy entity.

  Aftermath

  The treatment of certain liabilities, including Oak Finance loans, became the subject of litigation by investors.

  Source

• 1999

  Transition from the escudo to the euroGeneration change

  Background

  Portugal adopted the euro as part of European monetary integration.

  Action taken

  Banco de Portugal stopped issuing the Portuguese escudo and began operating as a national central bank within the Eurosystem.

  Aftermath

  Portugal's monetary policy became part of the single euro-area framework, while the bank retained national cash, supervisory and financial-stability responsibilities.

  Source

• 1975

  Assumption of formal banking-supervision responsibilityStrategy

  Background

  Following nationalization in 1974, Portugal adopted a new Organic Law defining a wider institutional role for Banco de Portugal.

  Action taken

  The bank was made responsible for supervising Portugal's banking system.

  Aftermath

  Banking supervision became a core function alongside central banking and currency operations.

  Source

1. 1Banco de Portugalen.wikipedia.org