Bank of Portugal Chief Cleared of Wrongdoing in Ethics Probe

Joao Lima and Henrique Almeida
·2 min read
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(Bloomberg) -- The Bank of Portugal’s ethics commission cleared Governor Mario Centeno of any wrongdoing after his independence was questioned when he was proposed as a possible successor to the country’s outgoing prime minister.

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“The governor, on a subjective level, acted with the required reserve in those concrete circumstances, fulfilling his general duties of conduct,” the commission said in a statement on the central bank’s website on Wednesday.

“However, on an objective level, subsequent political-media developments may bring damage to the bank’s image,” it added. The comments follow a meeting on Monday to evaluate Centeno’s actions.

Prime Minister Antonio Costa unexpectedly resigned last week amid a probe into possible government corruption. President Marcelo Rebelo de Sousa on Thursday called an early election on March 10, adding that the resignation will formally take effect in early December.

Costa, who’s been prime minister since 2015, said he’d offered the president an alternative to early elections, consisting of a government led by Centeno. Center-right party PSD, the biggest opposition group in parliament, said this demonstrated the central bank governor’s lack of independence.

Centeno previously served as finance minister in two Socialist minority governments led by Costa, who named him Bank of Portugal head in 2020 for a five-year term.

Speaking to Bloomberg Television on Wednesday, the Portuguese official ruled out any desire to run for office and said he remained focused on leading the institution.

“I never switched my attention away from central banking, this is my role today,” said Centeno. Asked if he had any political ambitions at some point, Centeno replied: “Not at all.”

Centeno added that market reaction to the political crisis in Portugal that unfolded at breakneck speed last week was “quite OK.”

“Portugal is performing very well under the circumstances in which we are,” said Centeno, citing lower debt, higher wages, economic growth above the European Union average and a strong labor market. “We need to keep up with this.”

--With assistance from Anna Edwards and Tom Mackenzie.

(Updates with Centeno comments in Bloomberg television interview starting in seventh paragraph.)

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