Bank of Portugal Governor Publicly Censures Banking Sector Over Decade-Long 'Cartel' Case

The Governor of the Bank of Portugal, Álvaro Santos Pereira, delivered a rare public rebuke of the country's banking sector today, condemning the practices exposed in the now-expired "banking cartel" case and calling Portugal's legal prescription framework "unacceptable."

Testifying before Parliament's Budget, Finance and Public Administration Committee on April 1, Santos Pereira said the conclusions reached by the Competition Authority and courts "describe behaviors we can only censure and do everything to prevent from recurring."

The case, which began with a 2012 whistleblower complaint from Barclays, involved nearly every major Portuguese bank exchanging confidential information about credit practices for more than a decade. The Competition Authority imposed fines totaling €225 million on institutions including Caixa Geral de Depósitos and Banco Comercial Português.

But after years of appeals, the Lisbon Court of Appeal ruled the case had exceeded the statute of limitations. Every fine was nullified — except for €1,000 imposed on Banif, which chose not to appeal.

'Prescription Is Not Acceptable'

Santos Pereira made clear he considers the outcome a systemic failure, not an exoneration.

"Is it acceptable to have a situation where, in several important cases in the country, it's possible to appeal repeatedly until prescription occurs? It is not acceptable," he said, though he noted that changing the law is Parliament's responsibility, not the central bank's.

The first-instance Tribunal for Competition, Regulation and Supervision had sided entirely with the Competition Authority, backed by opinions from the EU Court of Justice. But the Lisbon Court of Appeal dismissed the case on procedural grounds, and the Constitutional Court refused to hear the Authority's challenge.

The Communist Party has since tabled a proposal to prevent prescription from applying to future major competition cases involving large corporations — including ongoing investigations in retail and energy. That debate is scheduled for April 17.

Barclays Walked Free by Cooperating

The whistleblower protections that allowed Barclays to escape punishment were introduced by Santos Pereira himself when he served as Economy Minister from 2011 to 2013.

"I was the one who introduced the Competition Law that allowed for the reporting of these cases when I was Minister of Economy," he reminded lawmakers. "If there is a law that gives more strength, it was through that law that these mechanisms were introduced in Portugal."

Barclays, embroiled in the global Libor scandal at the time, handed over internal documents detailing the information-sharing arrangements and cooperated fully with investigators in exchange for immunity.

'Less Likely to Happen Again' — But No Complacency

Santos Pereira acknowledged that the regulatory environment has changed significantly since the exchanges took place in the 2000s. Many banks have since revised their codes of conduct to prohibit such practices.

"The regulatory and supervisory context today is very different from what we experienced 20 years ago, and it reduces the likelihood of similar situations occurring," he said. "But that cannot leave us satisfied or complacent."

He confirmed the Bank of Portugal was unaware of the practices at the time they occurred, but vowed the institution would remain "demanding, vigilant — or, if you prefer, intrusive" in its oversight going forward.

What It Means for Consumers and Immigrants

The case has left a bitter taste for consumer advocates, who argue that the protracted appeals process allowed banks to escape accountability for anti-competitive behavior that likely drove up borrowing costs.

For foreign residents navigating Portugal's banking system, the episode underscores the importance of shopping around. While many banks have tightened internal controls, competition remains concentrated, and smaller lenders or digital banks may offer better terms on mortgages, personal loans, and business credit.

The upcoming parliamentary debate on prescription reform could set an important precedent — not just for banking, but for all high-stakes competition cases where corporate defendants have the resources to outlast regulators in court.

Santos Pereira's public criticism, meanwhile, signals that the central bank is unwilling to let the matter fade quietly. Even if the fines are gone, the reputational damage may prove longer-lasting.

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