Africa-Press – Cape verde. The Bank of Cape Verde (BCV) announced this Thursday that it had recommended the country’s commercial banks not to participate in an auction of deposits from the National Social Security Institute (INPS) until instruments are created to mitigate liquidity risk.
The Cape Verdean banking regulator’s reaction follows a complaint from the country’s largest trade union federation, which today accused Banco Cabo-verdiano de Negócios (BCN) of not transferring 1.3 million euros to the National Social Security Institute ( INPS), after an auction.
BCV stated that it only became aware of the auction on December 12, 2023, when it received a complaint signed by the majority of participating banks, alleging “lack of transparency in the process”.
Among the points mentioned were “lack of communication to competitors about the competition regulations, the rationale for choosing the chosen ratios and their weighting, as well as concerns about risks to the financial system, due to the nature of INPS as a systemic depositor”.
The Cape Verdean banking regulator stated that, after receiving the complaint, it carried out internal tests that demonstrated that the “continuity of auctions, as carried out, could negatively impact some banks’ ratios, namely liquidity ratios”.
“The Bank of Cape Verde could not ignore the complaint presented, especially when subscribed by the majority of banks participating in the auction (four of the six participating banks)”, said the institution.
“In view of the vulnerabilities identified, particularly the concentration in certain sources of financing, the Bank is considering defining macroprudential instruments to mitigate systemic liquidity risk, which are already being studied”, concluded the BCV.
At today’s press conference, the general secretary of the National Union of Cape Verdean Workers – Central Sindical (UNTC-CS), Joaquina Almeida, accused the BCV of being an “accomplice” in the failure to transfer funds from the BCN to the INPS, due to the recommendations it made.
The BCN is led by the Cape Verdean insurance company Ímpar, with a share of 86.76%, and is also participated by the Cape Verde Red Cross (4.44%) and several private investors (8.80%), and on 31 December 2021 had a total share capital of 900 million escudos (8.1 million euros).
According to statistics, the INPS, created in 1991, has 238,965 beneficiaries of the social security system, 41% of whom are active insured people, 3.2% are pensioners, 2.9% are public sector pensioners, 48.6 are family members and 4.3% under convention.
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