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Reorganisation of the banking supervisory function

The Board of Directors of Banco de Portugal, based on the results of studies carried out in 2010, has decided to reorganise the banking supervisory function, separating the tasks previously concentrated in the Banking Supervision Department into three departments: Banking Prudential Supervision Department (DSP); Banking Conduct Supervision Department (DSC) and Legal Enforcement Department (DAS). Each department focuses on one of the three core missions of the supervisory function.

The reorganisation of the banking supervision carried out by Banco de Portugal as from January 2011 is in line with the guidelines and recommendations of several international bodies and of the European Union, with a view to increasing the effectiveness and efficiency of supervisory mechanisms against the background of new financial activity conditions. Like other EU Member States, Banco de Portugal follows the best practices and lessons learnt from the international financial crisis that erupted in 2007.

In this context, the Banking Prudential Supervision Department (DSP) is responsible for prudential regulation and supervision, aimed at the stability, efficiency and soundness of the financial system and at the solvency, liquidity and good internal governance of supervised institutions. It is also this department’s responsibility to contribute to macroprudential supervision. Mr. Vasco Pereira was appointed as Head of Department.

The Banking Conduct Supervision Department (DSC) is responsible for the regulation and supervision of the conduct of credit institutions in the relationship with their customers as regards selling practices and disclosure of information on retail banking products and services. This Department is also responsible for strengthening the rules of conduct and transparency to be complied with by credit institutions and for implementing initiatives regarding the supply of information to bank customers and the promotion of financial literacy. Mrs. Maria Lúcia Leitão was appointed as Head of Department.

The Legal Enforcement Department (DAS) is in charge of the legal enforcement tasks. It is this department’s responsibility to: impose penalties on administrative offences falling within
the remit of banking supervision and of all other areas of intervention by the central bank;
oversee the observance by financial institutions of the preventive duties in the field of money
laundering and terrorist financing; protect the “banking perimeter” against the exercise of
unauthorised financial activity; and take enforcement measures that do not have a
sanctionary nature (e.g. cancellation of the registration with Banco de Portugal of members of
management and auditing boards of credit institutions, imposition of extraordinary
reorganisation measures or withdrawal of the authorisation to carry on financial activity). Mr.
José Nunes Pereira was appointed as Head of Department.

The new Heads of Department were already holders of top-management positions in Banco de Portugal.

Banco de Portugal intends to progressively increase the number of its technical staff with functions in the field of banking supervision, in accordance with the orientation expressed by the European Central Bank – Opinion of the ECB of 12 November 2010 (CON/2010/80) – and bearing in mind the new tasks arising from increased regulatory and supervisory responsibilities and from its participation in the European System of Financial Supervision.

Lisbon, 7 January 2011