A Constitutional Court Ruling Upends the Extra Bank Contributions That Feed Portugal's Resolution Fund
The Constitutional Court has ruled that letting the Bank of Portugal set the annual rate of the banks' additional Resolution Fund contributions violates the Constitution, in a case brought by a bank contesting €36.89 million in charges — a crack in the mechanism that pays for the BES collapse.
A decade-old pillar of how Portugal pays for the collapse of Banco Espírito Santo has been knocked loose. The Tribunal Constitucional (Constitutional Court) has ruled that the way the additional contributions banks pay into the Fundo de Resolução (Resolution Fund) are set violates the Constitution, because the annual rate is fixed by the Banco de Portugal (Bank of Portugal) — an administrative authority — rather than by law.
The ruling, handed down in a July judgment and first reported by ECO, concerns the additional contributions to the Resolution Fund, not the separate levy on the banking sector. Those additional payments were created to allow the fund to meet the obligations it took on through resolution measures applied up to 31 December 2014 — the year BES was resolved. The fund itself was created in 2012 and was activated for the first time with BES; in 2025 alone, the additional contribution brought in €59 million, according to the fund’s annual report.
The case that reached the court was brought by an unidentified bank contesting the liquidation of its initial and periodic contributions for the fiscal years 2013 through 2017, totalling €36.89 million. The court’s objection is narrow but consequential. It accepts that these are financial contributions rather than taxes, and that the government may create them by decree-law without parliamentary authorisation. What it does not accept is that the law fixed neither the rate of the periodic contributions nor any limits within which it should fall, handing the annual quantification to an instruction from the Bank of Portugal.
“By remitting to an instruction of the Bank of Portugal the determination of the annual rate of the periodic contributions, without the law fixing the respective essential limits, the regime hands to an administrative authority the innovative shaping of an essential element of the tribute, in violation of the reserve of legislative function of the Constitution,” the judges wrote. Because the rate is set each year by notice of the central bank, the court added, the banks that must pay it have no way of anticipating the charge from the law itself.
The unconstitutionality does not touch everything. The initial contribution survives, because its rate was fixed directly in the 2013 decree-law that created it, and the other elements of the contributions — their incidence, base and deductions — also stand, since they appear in legislation. What falls is the normative foundation of the liquidations of the periodic contributions from 2013 to 2017, which depended on the rate the regulator set.
Nor does the decision have general binding force: it resolves one concrete case, and only repeated rulings in the same direction would generalise its effect. But the signal to the sector is unmistakable, and the financial stakes reach far beyond one bank’s €36.89 million. The Resolution Fund is still carrying the long tail of the BES resolution — it recently booked a €630 million reserve for possible BES compensation claims — and the additional contributions are one of the instruments that keep it solvent.
If other banks now contest their own liquidations on the same grounds, the state faces an uncomfortable choice: legislate the rates properly and quickly, or watch a funding mechanism built to make the banking sector — rather than taxpayers — pay for bank failures come apart one judgment at a time.
