Centeno says the country is in a moment of reflection and quotes poetry about the risks of being a freethinker.

The governor of the Bank of Portugal said this Thursday that the country is in a moment of reflection, citing David Mourau-Ferreira’s lines about the risks of being a freethinker, and advised banks to use “deserved” profits to prepare for the crisis. future.

At the opening of the conference “A Banca do Futuro”, organized by Jornal de Negócios and Claranet, Mario Centeno said that this meeting takes place “at a time when the country is invited to reflect, to reflect, that it is not only the governor of the Bank of Portugal who has been invited to reflect.”

The governor quoted lines from David Murau-Ferreira’s poem “Abandono”, which he said he remembered on Wednesday evening as he prepared his speech this Thursday morning.

“In your free thinking/They went so far to silence you/So much so that my cries/Cannot reach you,” Centeno said, without making such a connection to a recent political controversy in which he was involved . , his name was proposed by António Costa to replace him as Prime Minister, but with the financial sector.

“It is through free thinking that we have actually achieved the financial stability that banks enjoy today,” he added.

Centeno believes that the recent “process of transformation of Portuguese banking has been extraordinary” with asset reductions, bad debts falling, capital increases and profitability improving.

According to the governor, the current “results are deserved”, but they are also “cyclical and must be used to prepare for the future.”

“What I most wish for banks is for them to adopt sensible policies regarding the definition of impairment and capital. While many look at the results and find them extraordinary and excessive, these results are extremely cyclical in nature, and fortunately banks have responded to the remuneration issue. savings, attention to clients, there are tens of thousands of reissued loans,” he said.

Last week, at a dinner at the American Club in Lisbon, the former finance minister (from António Costa’s party government) said that the economy goes through negative and positive cycles and that current bank profits are also the result of a positive cycle. and that they should set aside part of their profits to prevent negative periods in the future.

Centeno also praised the Portuguese economy, especially the improvement in public finances and the labor market, noting that in the eurozone, high employment levels are “the result of an excellent public policy response” during the pandemic crisis.

As for the future, he believes that the next few years will be difficult, also due to the external context.

As for a significant rise in interest rates, he said it would be “preferable that they do not go back to zero” but he expects them to fall to a range of 2% to 2.5%, consistent with a 2% inflation rate over the medium term. . .

“So that we get there, to carry out this normalization [da política monetária] and respond to inflation, it was necessary to raise the ECB’s key rates,” he said.

At the end of the conference, Centeno did not speak to journalists following the controversy that surrounded him due to the current Prime Minister António Costa’s proposal to replace him in the post.

Even after the President of the Republic, Marcelo Rebelo de Sousa, decided that early legislative elections would be held on March 10 following the dismissal of António Costa (for being the subject of an investigation by the Ministry of State), Centeno’s proposal attracted criticism. from the opposition parties and the dispute between Mario Centeno and the President of the Republic.

Speaking to the Financial Times on Sunday, the Bank of Portugal governor said he had received “an invitation from the president and prime minister to think and consider leading the government” and that he was “very far from doing so.” solution”.

In response, in the early hours of Sunday to Monday, the President of the Republic published a note in which he denied that he had invited anyone to head the government, including the Governor of the Bank of Portugal, Mario Centeno, or authorized any contacts to do so. made.

Marcelo Rebelo de Sousa’s statement prompted Centeno to correct his statement: “It is obvious that the President of the Republic did not invite me to lead the government” as he decided to dissolve the Assembly of the Republic, Mario Centeno said in a statement.

Mario Centeno’s conduct led to an extraordinary meeting of the Bank of Portugal’s Ethics Committee for assessment, which found that the manager had fulfilled his general duty of conduct and “acted with the necessary qualifications.” However, he adds that “at an objective level, subsequent political and media developments may damage the Bank’s image,” given that “the protection of the institution is even more relevant in a period such as the current one.”

In this sense, the commission chaired by Rui Vilar recommends that “the governor, the administration and the bank as a whole remain committed to protecting the image and reputation of Banco de Portugal.”