Certain reports in the media have linked Banco de Portugal with the responsibility of supervising unfair competition practices, following the recent investigations launched by the relevant authorities into suspected price fixing in the banking sector.

In order to inform the general public about Banco de Portugal's responsibilities, the following is made known:

1. It is the sole responsibility of the Competition Authority to supervise the general competition laws governing credit institutions' activity. That Authority has legal powers to maintain balanced competition and to penalise practices that may distort it (such as abuse of dominant position, creation of price cartels or concerted practices).
2. The banking conduct supervision carried out by Banco de Portugal has other goals, and thus is not oriented towards preventing or supervising any unfair competition practices between institutions. The law entrusts this task to another regulatory authority, the Competition Authority.
3. Banking conduct supervision focuses on the conduct of institutions, and on the actual relationships that institutions have with bank customers. As part of this, Banco de Portugal defines and implements transparency of information rules in the retail banking markets, in order to ensure balance in the contractual relationships between institutions and customers. For Banco de Portugal, transparency of information is essential for clients to know the conditions under which the various products and services offered by institutions are sold, especially in advertising campaigns and price lists. The bank customer and the general public can compare the conditions applied by credit institutions, and thereby make informed choices, which is a factor that encourages greater competition between institutions.
4. If in carrying out its specific supervisory role Banco de Portugal detects signs of potentially unlawful practice in the area of competition, it has the responsibility to report this to the relevant authority. Banco de Portugal follows the same procedure when it finds relevant signs of malpractice in any other spheres covered by other administrative or judicial authorities. In the case in question, this is not what happened. Banco de Portugal was only informed about the investigations after they had begun and within the tight restrictions imposed by judicial secrecy.
5. Banco de Portugal places the greatest importance on clearly demarcating the activity of the various authorities that regulate the financial sector. That clarity forms the basis of solid, efficient collaboration between regulators, with mutually exclusive, focused missions. Regarding competition, the Bank's work with the Competition Authority is provided under the terms and to the extent requested of it.
6. Banco de Portugal emphasises that the investigations launched by the Competition Authority as part of their normal operations in monitoring markets and detecting any unfair practices do not have implications for the stability of the financial system nor the soundness of the institutions. Portuguese banks have complied with a demanding capitalisation programme and have resourced themselves with an adequate financing structure.
7. Banco de Portugal is known to have strengthened banking sector supervision considerably, through a more intrusive approach to institutions and large cross-cutting inspection programmes. This process is unaffected and will continue to be strengthened in the future.

   Lisbon, 7 March 2013