Bank of Portugal says Centeno did not break ethics rules

The committee warned that subsequent political and media developments "could damage the image" of the central bank and added the bank's defence "is even more relevant in a period like the current one". It recommended that the governor and administration "remain committed to safeguarding the image and reputation of the Bank of Portugal".

The Bank of Portugal's ethics committee has ruled that Governor Mario Centeno did not violate its code of conduct when he was invited by outgoing Prime Minister Antonio Costa to replace him as premier, the central bank said on Wednesday.

Portuguese opposition parties have argued that such an invitation compromised the political independence of the central bank governor, who is also a member of the Governing Council of the European Central Bank. Centeno said on Monday he never accepted the offer but was just asked to ponder on the matter.

In a statement, the Bank of Portugal cited the ethics committee as saying that Centeno acted with "the reserve required in the specific circumstances and fulfilled his general duties of conduct", regardless of other developments that were beyond his control. Costa, who resigned last week amid a corruption investigation, told President Marcelo Rebelo de Sousa that instead of an election, his Socialist party proposed appointing Centeno, a former finance minister in Costa's administration, as premier.

The president ended up rejecting the proposal and calling a snap election for March 10 instead. The committee warned that subsequent political and media developments "could damage the image" of the central bank and added the bank's defence "is even more relevant in a period like the current one".

It recommended that the governor and administration "remain committed to safeguarding the image and reputation of the Bank of Portugal".