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The governor of the Bank of Mozambique on Monday proposed the creation of a common understanding in the Portuguese-speaking area to deal with bank resolution processes.
“The most important thing we lack is cross-border regulation. It practically does not exist. We should also be more aggressive in the area of cooperation, for example through a memorandum of understanding that goes beyond supervision and enters into bank regulation,” Bank of Mozambique governor Rogério Zandamela said.
Speaking in Lisbon on Monday at the 27th meeting between the central banks of Portuguese-speaking countries, Governor Zandamela spelled out the case of “a bank that is operating well in Mozambique but has received state intervention in the parent company”, a reference to the Portuguese Novo Banco, a shareholder of Moza Banco in Mozambique.
“When taken to the extreme, cases such as these have implications beyond the regulator, imply bringing the Ministry of Finance to deal with them, and if we do not deal with this in advance, we risk political tensions on how to distribute the costs of rescuing the bank,” he said.
Acknowledging that “there is good will on the part of the governors” but arguing that “we need to go further and institutionalise how these matters are handled”, Zandamela added that his idea was “challenging, but just a suggestion”.
In a comment immediately after Zandamela’s speech, Carlos Costa, president of the Portuguese Central Bank, agreed with the idea, saying, “The challenge is accepted, and there is willingness to work on it”.Source: Lusa