Ladies and gentlemen,
Good afternoon.
It is a great pleasure to welcome you to Banco de Portugal's Money Museum, and to greet those joining us online.
I am delighted to open this conference dedicated to the findings of Portugal's Financial Sector Assessment Program.
Allow me to begin by expressing my sincere appreciation to the International Monetary Fund for the excellent work carried out throughout this assessment. The FSAP is a demanding and comprehensive exercise, and we greatly value the professionalism, technical excellence and constructive dialogue that characterized our cooperation throughout the process.
I would also like to thank all the national authorities and institutions that contributed to this exercise.
Allow me to address a special word of recognition to the Banco de Portugal team behind this work.
The FSAP brought together colleagues from across the institution, combining different areas of expertise and perspectives in a spirit of cooperation and shared purpose.
This collective effort reflects one of Banco de Portugal's greatest strengths: our ability to work as one institution, across functions and disciplines, in pursuit of the public interest.
Their dedication, professionalism and commitment were fundamental to the success of this assessment.
For Banco de Portugal, independent international assessments such as the FSAP are of considerable value.
They are exercises in transparency, accountability and institutional learning.
They provide an opportunity to assess not only where we stand today, but also whether we are sufficiently prepared for the challenges that lie ahead.
The FSAP offers a rigorous and comprehensive evaluation of the financial system. It helps identify strengths, vulnerabilities and areas where supervisory, regulatory and policy frameworks can be further strengthened.
Equally important, it offers an external perspective that challenges institutions to reflect on whether they remain prepared for an evolving and increasingly uncertain environment.
Its value lies not only in the depth of its analysis, but also in its breadth.
By bringing together institutional, supervisory, macroprudential and crisis-management dimensions, it offers a comprehensive view of the financial system's resilience and its ability to withstand adverse shocks.
Financial stability may sometimes seem abstract, but its effect on people's lives is very real.
A sound financial system allows households to safeguard their savings, enables businesses to access financing, supports investment and economic activity, and ensures that the essential infrastructure of modern economies functions smoothly.
When financial systems are unprepared for shocks, the consequences extend well beyond the financial sector itself.
This is why open and informed discussion of the FSAP findings is so important.
Strong institutions are strengthened, not weakened, by scrutiny.
Constructive debate, grounded in evidence and rigorous analysis, is an essential component of institutional credibility.
Today's conference is therefore an opportunity to discuss the findings, reflect on the progress achieved, and consider the challenges still ahead.
Twenty Years of Transformation
This assessment takes place approximately twenty years after Portugal's previous FSAP.
Over those two decades, the Portuguese financial system has undergone a profound transformation.
It has navigated the global financial crisis, the sovereign debt crisis, the pandemic and a period of significant economic adjustment.
At the same time, it has evolved within a fundamentally different European institutional landscape, shaped by the creation of the Banking Union, stronger supervisory arrangements and new frameworks for crisis management and resolution.
The financial system assessed today bears little resemblance to the one examined twenty years ago.
This makes the current FSAP particularly valuable.
It allows us to take stock of the progress achieved and to assess whether our institutional arrangements remain fit for purpose in a world where new sources of risk continue to emerge.
The relevant question is therefore not simply:
Are we stronger than we were twenty years ago?
It is also:
Are we prepared for what comes next?
Progress Recognised by the FSAP
One of the most important conclusions of the assessment is the recognition of the substantial progress achieved by the Portuguese banking sector and by the financial stability framework more broadly.
Over the past decade, Portuguese banks have strengthened their capital and liquidity positions, improved asset quality, reduced legacy vulnerabilities and enhanced their operational resilience.
The stress test exercise conducted under the FSAP points to a banking system capable of withstanding very severe adverse scenarios.
At the same time, supervisory, macroprudential and resolution frameworks have become stronger, more sophisticated and increasingly integrated within the European architecture.
The result is clear.
The Portuguese financial system is today more resilient, better prepared and better equipped to absorb shocks than it was in the past.
This progress deserves recognition.
It reflects years of sustained effort by financial institutions, supervisors, policymakers and public authorities working towards a common objective: strengthening confidence in the soundness and stability of the financial system.
And confidence remains one of the most valuable assets any financial system can possess.
Looking Ahead: Preparing for a Changing Risk Landscape
Yet resilience can never be taken for granted.
Financial stability is not an achievement that can simply be declared and preserved.
It is a continuous endeavour. Complacency should never be an option.
Financial stability requires vigilance, adaptability and forward-looking policymaking.
The risk landscape continues to evolve.
Alongside more traditional risks, we face new challenges arising from technological innovation, cyber threats, geopolitical uncertainty and climate-related vulnerabilities.
These developments create important opportunities.
But they also generate new sources of risk and new channels through which shocks can propagate across financial systems.
Recent experience has highlighted the importance of operational resilience.
Events such as the Iberian power outage of April 2025 reminded us that resilience and redundancy are not merely technical considerations.
They are fundamental pillars of financial stability.
At the same time, digitalization, artificial intelligence and increasing dependence on complex technological ecosystems are transforming the operating environment of financial institutions.
Safeguarding financial stability in this environment requires robust institutions, effective policy frameworks and, above all, the capacity to adapt as risks evolve.
This brings me to another important contribution of the FSAP.
The assessment does not simply evaluate the current state of the system.
It also helps to identify areas where the framework can be further strengthened.
We welcome that contribution.
Banco de Portugal is fully committed to carefully assessing the findings and recommendations of the exercise and to working closely with all relevant stakeholders on their follow-up and implementation.
Work is already underway in several areas covered by the assessment.
In some cases, the recommendations reinforce initiatives already in progress, including the recent revision of Banco de Portugal's macroprudential recommendation on borrower-based measures.
These instruments play an important role in promoting prudent lending standards and mitigating the build-up of vulnerabilities associated with excessive indebtedness.
In other areas, implementation may require legislative changes and close cooperation between Banco de Portugal, the Government and other national and European authorities.
Banco de Portugal stands ready to contribute constructively to this process, helping ensure that any future reforms are coherent, proportionate and effective.
Conclusion
Ladies and gentlemen,
The FSAP came at a particularly important moment.
We live in a world where uncertainty has become a defining feature of the financial landscape.
Our responsibility is not only to address today's challenges.
It is also to ensure that institutions and authorities are prepared for the risks of tomorrow.
A resilient financial system supports households and businesses, facilitates investment and innovation, contributes to sustainable growth and, when shocks occur, helps the economy absorb them rather than amplify them.
The benefits of resilience therefore extend far beyond the financial sector itself.
Twenty years after Portugal's previous FSAP, the central message of this assessment is clear.
The Portuguese financial sector, and the institutional framework that supports it, are stronger, more resilient and better prepared to face future challenges.
But resilience is never a permanent achievement.
It must be preserved through vigilance, strengthened through adaptation and sustained through cooperation.
We cannot afford complacency.
The FSAP is an important contribution to this shared endeavour.
I am confident that today's discussions will deepen our understanding of the findings, enrich our perspective on the challenges ahead and help strengthen the foundations of a financial system that serves citizens, supports prosperity and sustains confidence in an increasingly uncertain world.
Thank you once again for your participation.
I wish you a productive and fruitful conference.
Thank you.