Lisbon, July 7, 2025 (Lusa) - The ’revolving door’ between the State and the banking sector decreased slightly between 2005 and 2020, according to a study by the Lisbon Resilience Association, which, however, already anticipates limited progress regarding the transfer from public office to banks.
“In the period analysed, the country had a positive and modest trajectory.” And it is already showing signs of reversal, we are already seeing signs that some ‘revolving doors’ that were reduced in the wake of the crisis may be reopened,” Luís Coruche, president of the Association for the Resilience of the Lisbon Region, told Lusa, referring to the study ‘Revolving Doors between Banking and the State’ now published.
For the study that the Civic Rating Agency (a structure within the association) carried out, experts and academics from various fields analysed 14 banks and a sample of one third of all members of the governing bodies of each bank between 2005 (the year before the sovereign debt crisis) and 2020 (the year after the debt crisis).
The analysis takes into account people who have moved from political positions, public office and regulatory bodies to positions in the financial system (the study focused on the reverse movement, from banks to the State).
In general, people consider the phenomenon of ‘revolving doors’, where people move between important positions in politics and the public and private sectors, to enhance the risk of conflicts of interest and influence peddling.
The conclusions are that there was a slight improvement in ‘revolving doors’ in Portugal between 2005 and 2020, and mechanisms created in the wake of the crisis drove this progress: a transparency package (regime for political positions and senior public officials, anti-corruption mechanisms, etc.), European legislation and supervision (such as the European Central Bank’s assessment process for bank directors) and a reduction in the number of members of banks’ governing bodies.
In the pre-crisis period, the bank with the most potentially problematic connections arising from ‘revolving doors’ was Banco Espírito Santo (BES), which ultimately became embroiled in a major financial scandal in 2014. In the post-crisis period, Caixa Geral de Depósitos was the bank with the highest risk; however, the study notes that several mitigating factors exist, as it is a public bank.
However, although the study notes the "timid but positive trajectory" in terms of “gates of circulation” between banks and the state, it considers that "there are already signs of reversal" and argues that the government and parliament should "establish guidelines and mechanisms" to regulate this circulation, considering that prevention is too dependent on the European Central Bank (ECB) and national rules are lacking.
The study also calculated the risk of the macro-financial impact of these ‘revolving doors’, stating that there is an “estimated exposure of public coffers in the order of €1.6 billion per year”.
It added that “the estimate is conservative, given that the analysis carried out in this study will still incorporate the mapping of potentially problematic links in terms of the departure of banking institutions to take up political, public and regulatory positions, as well as the links associated with banks based internationally but operating in the Portuguese financial system”.
As for the Association for the Resilience of the Lisbon Region, Luís Coruche (an expert in urban sustainability) explained that independent citizens founded it 10 years ago with no party or economic interests, and the association currently has around 40 members. The aim is to conduct civic monitoring in the economic, social, and environmental areas, thereby contributing to the consolidation of democracy.
Within this association, the Civic Rating Agency structure proposes to carry out regular analyses of the financial system and began its work with the study ‘Portas Giratórias entre a Banca e o Estado’ (Revolving Doors between Banking and the State), which it financed through fundraising, considering that the financial system is very important in democracy and must be safeguarded.
“Banks and the state should embrace a broad focus on democratic consolidation rather than an exclusive emphasis on immediate profit and surplus. The quality of democracy has positive multiplier effects on financial stability, economic competitiveness and social development,” the report reads.
The study also includes several proposals related to the financial sector. For example, it proposes that researchers study replacing specific taxes on banks (the Contribution on the Banking Sector and the Additional Solidarity Contribution) with a ‘Reactive Tax on the Quality of Banking Services’. It argues that the tax would rise or fall with the quality of the service the bank provides to the economy and society (requiring clearly defined quality indicators).
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