LISBON Oct 10 A European financial transactions
tax would put Portuguese banks in a competitive disadvantage and
may further complicate lending to the economy in a crisis-hit
country already deep in recession, the head of its banking
"Its application in just some member states would provoke
market distortions with very negative consequences for the
countries that impose it early," Fernando Faria de Oliveira
wrote in an e-mailed reply on Wednesday to questions from
But it was not yet clear if the measure would be taken, he
said, adding he hoped it would at least not feature in the 2013
Eleven euro zone countries agreed on Tuesday to push ahead
with a tax on their financial transactions, an initiative that
several other EU nations oppose but which has been pushed hard
by Germany and France.
"It would be a significant competitive disadvantage for the
Portuguese banking system that is solid and solvent," wrote
Faria de Oliveira, who is also board chairman at the country's
largest bank Caixa Geral de Depositos.
Although frozen out of the interbank funding market due to
the sovereign debt crisis, Portuguese banks have improved their
capital ratios to meet European solvency requirements. But
lending to the recession-struck economy has been sliding as bad
loans are mounting.
"Aside from an impact on banks' profitability, such a
measure could aggravate lending conditions to companies and
individuals that are already much worse than those practiced in
countries not affected by the crisis. It could also affect their
recourse to the capital market," Faria de Oliveira wrote.
(Reporting By Sergio Goncalves, writing by Andrei Khalip;
editing by Ron Askew)