The committee of inquiry into Caixa Geral de Depósitos has issued a near-final report that blames the crisis for the bank’s acute problems and does not blame those running the bank for the long list of failed loans, vanished clients and illegal kick-backs.
This is what happens when a committee only has access to those working at the bank rather than being allowed to peruse the actual loan records which have been kept secret - apparently, to reveal them would ‘compromise customer confidentiality.’
The parliamentary inquiry committee was limited to investigating the bank’s recapitalisation and its management between 2000 and 2016.
Conclusions include an admission that "analytical errors" were made but, based on the testimony of just 19 former managers, the report still refutes the widely held belief that there had been pressures on managers to favour certain top clients with uncollateralised loans.
The committee has complained that it did not have the tools to do the job as key documentation has been withheld from committee MPs.
The bank was forced to a recapitalise in 2012 in the amount of €750 million and again in 2016 with about € 5 billion - all paid for by taxpayers who have been in kept the dark and seem destined never to know what really caused these massive losses while reading about various investigations in the newspapers.
Between 2005 and 2010, Caixa Geral de Depósitos managers made a series of large loans without the necessary guarantees or with guarantees that were insufficient for the risk involved. Most of these borrowers remain incognito.
These loans went bad and caused the bank to seek additional financing from the taxpayer to make up the losses as Caixa Geral which suffered a loss of €1.8 billion and impairments of more than €3 billion.
Much of the responsibility for the ensuing 'high capital needs' (aka, bailout) is due to the crisis, "It is obvious that as the crisis deepened and problems began to arise at Caixa Geral, namely in terms of credit default or asset devaluation, the network became more tight and structural changes were introduced, not always by its own decision," read the preliminary findings.
The committee acknowledges that the preliminary conclusions are conditioned by the refusal by Caixa Geral to hand over potentially crucial information. This stance has been backed up by the Ministry of Finance, the Bank of Portugal and the Securities Market Commission and denies the public the opportunity to know what was being done in its name by its managers.
These entities created "an obstacle to the work of MPs," who were forced to draw conclusions based pretty much on the testimonies of former directors and administrators of the bank (who may not have been entirely truthful.)
Another limitation is the fact that this committee of inquiry has been working at the same time as another committee looking into Caixa Geral. The second committee is looking at the Government's performance in the appointment and removal of the failed bank president, António Domingues.
None of those interviewed acknowledged that they or their teams granted credit without meeting risk assessment criteria. They admitted, at most, "errors of project analysis and forecasting or the unexpected size of the economic and financial crisis which began in 2008."
The report states that the most scrutinised cases were the transfer of the Pension Fund to Caixa Geral de Aposentações, the process related to the sale of the Champalimaud group, the acquisition and financial participation in BCP, and loans granted to the Vale do Lobo project (currently under investigation), the La Seda project (under restructuring), the Douro Litoral motorway and the sale of Caixa's stake in Cimpor to the Brazilian company Camargo Corrêa.
Many of these highly suspicious loans were granted at the time when Carlos Santos Fereira and Armando Vara led Caixa Geral and José Sócrates was prime minister.
The "economic and financial crisis" of recent years showed the importance of having a bank with 100% public capital "to help strengthen the stability of the financial system." Therefore, the committee rapporteur Carlos Pereira recommends that Caixa Geral be kept public.
This nearly completed report inevitably will come in for stiff criticism as it seems to have got no closer to the truth as to how this huge bank managed to be run so badly it needed more taxpayer funds to keep it afloat, yet taxpayers are not allowed to know 'who, how and why?'
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