Below, you will find the issue of our Banking and Finance and Capital Markets newsletter for the 1st quarter of 2021, which compiles the most significant news in this area.

BANKING AND FINANCE

I. Banco de Portugal

Banco de Portugal press release on the countercyclical capital buffer for the 2nd quarter of 2021. The countercyclical capital buffer percentage in force from 1 April 2021 will remain at 0% of the total amount of exposures (link).

Banco de Portugal press release on the implementation of the macro prudential recommendation in force in the context of consumer credit. It concludes that there was general compliance with this measure and an improvement in the risk profile of borrowers during 2020. Almost all new credit agreements for borrowers to buy their own permanent homes had an associated LTV (loan-to-value) ratio below the 90% limit. This confirmed what had already been observed in 2019. In turn, around 93% of all new housing and consumer credit agreements were granted to borrowers with a DSTI (debt serviceto-income) ratio of 50% or less. (link).

Instruction (Historical) no. 1/2021 - Revokes Banco de Portugal Instruction no. 2/2007, which requests the disclosure of information on the evolution of the credit portfolio.

Instruction (Historical) no. 2/2021 - Defines low and high risk factors for money laundering and terrorist financing and specific simplified or enhanced identification and due diligence measures.

Instruction (Historical) no. 4/2021 - Strengthens regulation of the operational and security risks of payment service providers.

Circular Letter no. CC/2021/00000001 - Updates the cut-off date for signing up for and applying General Payment Moratoriums and implements the changes resulting from the Guidelines amending the EBA/GL/2020/02 Guidelines on legislative and non-legislative moratoriums on loan repayments applied in the light of the COVID-19 crisis (EBA/ GL/2020/15), while maintaining all other content of Circular Letter CC/2020/00000022 in force.

New rules came into force on 1 January that limit or prohibit the charging of commissions for providing services associated with credit agreements and for making transfers through payment applications operated by third parties.

Banco de Portugal has presented the Cooperation Plan for 2021 and this plan sets out the cooperation activities the bank plans to carry out with the central banks of emerging and developing countries. Despite the difficulties caused by the pandemic, 158 actions are planned for this year and they are expected to take place mainly remotely.

Banco de Portugal publishes a reporting template for financial entities operating under the freedom to provide services (link). Banco de Portugal discloses the maximum rates applicable to consumer credit contracts in the 2nd quarter of 2021 (link).

Banco de Portugal discloses the maximum rates applicable to consumer credit contracts in the 2nd quarter of 2021 (link).

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