The Pattern of Banking Liberalization in Portugal: 1984-1990

• Autor(a) principal: Mexia, António
• Data de Publicação: 1991
• Outros Autores: Leite, António Nogueira
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/85865

This paper analyzes the process of banking liberalization in Portugal and highlights some of the ambiguities characterizing the conduct of banking authorities throughout the period spanning from 1984 to 1990. During these years the banking sector has been subject to an ambiguous process of liberalization. On the one hand, private banks and a series of other financial institutions were allowed to operate in Portugal, and the removal of credit ceilings and a series of other constraints on banking activity together with gradual deregulation in conformity with EC directives line created a n.crz competitive environment, leading banks to develop some or the strategies and competitive positioning which will be crucial once full financial integration and banking liberalization take place. On the other hand, banking authorities have to far delayed the implementation of complete liberalization through the maintenance of discretionary barriers to entry into the system. This has allowed the persistence of monopolistic behavior (and rents) limiting the extent of the price effects of liberalization. The paper provides an analysis of the consequences of this "controlled" liberalization for bank conduct and performance, coupled with an assessment of its rationale and an evaluation of its results and implications for the economy at large.