"AD and PS measures for credit leave risk on the State's side" (with João Santos Carvalho)

«João Santos Carvalho, a Partner in the Banking and Finance law area at SRS Legal, points out that there is already an exception to these rules: if the house belongs to the bank, the financing can be 100%. "It's a good example of an exception," he says, explaining that one possibility could be to add a second exception to the recommendation, which is not binding. This follows a "comply or explain" logic, meaning that banks could be called upon by the regulator to explain if there is a significant deviation from the rule.

"Conceptually I think it could be implemented in conjunction with the Bank of Portugal, but it would have to be agreed with the regulator beforehand and not the other way around. From a legal point of view, the two [support and recommendation] can coexist," says João Santos Carvalho.»