Bank of Portugal governor quizzed on housing risk and stock trades as central bank slims HQ project

Governor faces parliamentary committee

Álvaro Santos Pereira, governor of the Bank of Portugal, appeared before the parliamentary budget and finance committee (COFAP) on 9 July 2026. The session addressed two contentious topics: a new macroprudential recommendation to tighten mortgage lending standards and the governor's own personal stock purchases after taking office. Representatives from several parties pressed him on ethical standards and the efficacy of the central bank's policy tools.

Housing market correction flagged as top systemic risk

Santos Pereira warned that a potential correction in housing prices represents the greatest systemic risk to the Portuguese economy. He cited a deficit of 300,000 homes, a 164% surge in prices between 2015 and 2025, and the fact that 54% of home acquisitions are financed through bank credit. The central bank adopted the macroprudential recommendation to prevent household over-indebtedness, he explained, as credit conditions had been loosening in recent years.

Passivity is not an option.

The correction of housing prices is the main systemic risk for our economy.

The governor also pushed for making macroprudential recommendations binding, a stance that met resistance from PSD deputies, who argued that banks already conduct rigorous borrower assessments.

Headquarters plan slimmed by up to €40 million

In a separate announcement the same day, the Bank of Portugal revised its plans for a new headquarters in the Entrecampos district of Lisbon. The institution scrapped an earlier deal to purchase two buildings from insurer Fidelidade, opting instead for a single building. The new approach is projected to cost between €217 million and €227 million, including acquisition and interior work, saving €35 million to €40 million relative to the initial project.

Stock trades and political fire

The second half of the hearing probed the governor's acquisition of shares in Jerónimo Martins, Galp Energia, Nestlé, and Navigator between December 2025 and January 2026. Santos Pereira insisted that he had proactively disclosed the trades and that ECB rules permit governors to hold securities in non-financial companies but not to acquire them while in office. He reported a capital gain of €3,361 from the subsequent sale and donated the full amount to the Make a Wish foundation.

Socialist Party deputy Carlos Pereira accused the governor of "serious ethical and institutional failings," questioning the timing of the purchases around an ECB meeting where inflation and energy topics were discussed. Liberal Initiative deputy Mário Amorim Lopes described the affair as a "lack of foresight that could have been avoided." The Chega party, which requested the hearing, asked whether Santos Pereira had used privileged information; he denied any wrongdoing.

The controversy surfaced after newspaper Público reported on 27 April that the governor had bought shares while in office. Santos Pereira filed a declaration of interests with the ECB on 12 January 2026.

It is quite strange that someone who accepts being governor does not realise that this type of action cannot be taken because it jeopardises the transparency of institutions.

This was a lack of foresight that could have been avoided if it had been safeguarded beforehand.