Portugal’s government intends to create a new financial supervisor which would carry out bank rescues and take on the role of ensuring the overall stability of the banking system, Reuters has reported.
The new entity would rank above the central bank, the CMVM stock market regulator and the authority which supervises insurance and pension funds.
The changes, which would take the responsibility of bank rescues and oversight of overall financial stability away from the Bank of Portugal, could potentially go against efforts to assign more banking sector supervision in the eurozone to European institutions.
Finance Minister Mario Centeno said the change was necessary after recent high-profile bank failures “oblige us to return to question the efficiency of the supervisory system.”
Centeno told parliament the new supervisor would be independent and replace two existing councils that oversee the financial system. They include members from the central bank, finance ministry and market regulators.
“This new entity would have ultimate responsibility for financial stability and should function as the macroprudential authority and national resolution authority,” Centeno said.