Lisbon: The Securities Exchange Commission of Portugal

This series of posts describes a study abroad course in which students visited several central banks and talked with central bankers about how they responded to—and sometimes failed to respond to—the global financial crisis, and how they are adjusting to their new roles.

by Oscar Olmos Jr

May 25, 2015, our study abroad group had the privilege to visit the Portuguese Securities Exchange Commission. Initially, this visit seemed rather unorthodox as our trip was to focus on the Central Banks of Europe. However, to our surprise, this was an extremely beneficial visit in understanding the reform of financial governance after the Financial Crisis.

During this visit, the S.E.C. discussed a variety of their roles, but there were three which really stuck out to be the most important that any institution could do for people investing within the European Market: their report audits, their financial literacy courses, and their financial instrument consumer protection. As I was learning about this I was simply in awe as I trade in my spare time, and knowing that there was an agency that protects its consumers I was just amazed by their high standards.

The S.E.C. offers a financial literacy course to the public in order both to increase the public’s understanding and capabilities, and to increase the total number of people who invest within the financial markets of both Europe and Portugal. In doing so, they hope to increase the total proportion of households which invest from their strikingly low ten percent rate to around 50 percent of the population. This will create a more efficient market for everyone. While promoting financial literacy is something that agencies should do, I was very impressed by their dedication.

While the S.E.C. generates a variety of audits, in particular I see their audit process of asset valuation relative to the many other things they do to be one of the most useful to consumers. Margarida M. Rosa clearly explained that by using appropriate and conservative measures for asset valuation there may be a clear division between the appropriate returns and speculated returns when investing in a firm. This would be seen as the company would then have to report more accurate figures for their total assets rather than a false number which may make the company seem to be in a better standing financially than it really is. Having this accurate representation of a company’s financial standing allows investors to make better decisions on which firm they would like to invest in if any. Furthermore, proper valuation also allows for a more transparent market for all consumers.

By making sure that the consumer is aware of the financial risks they may be undertaking, then an auditor may able to gauge whether or not that the financial instrument they are purchasing is suitable for them. This may be easily seen as they may find the instrument to be too aggressive for their strategy, or trading habits. Furthermore, the S.E.C. also constantly gauges the riskiness of these financial instruments to also help consumers be aware of what the maximum loss may be due the riskiness of the instrument. Often, many people assume that maximum loss is the total amount initially invested, but certain financial instruments may yield a negative by having the investor pay capital in addition to losing their initial investment. As the S.E.C. continues to protect people from unknowingly investing within highly risky financial instruments, they aid in the recovery of the market since the financial collapse.

Overall, as the days of our study abroad trip began to wind down and perhaps our group grew that much closer, but we also grew closer to the feelings a government can have for its people. Even as we left we knew that the idealism witnessed and heard within that room would continue not just in Portugal, but in all of Europe. All I really knew by the end of it was that the beauty of Portugal could only be matched by the inner beauty of its citizens and how kind they were even to us travelers. In the end Portugal was a country that none of us could really forget, but I will also remember the lessons I learned within the Securities Exchange commission about responsible financial regulation.

Lisbon: The Securities Exchange Commission of Portugal

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Lisbon: Fado

This series of posts describes a study abroad course in which students visited several central banks and talked with central bankers about how they responded to—and sometimes failed to respond to—the global financial crisis, and how they are adjusting to their new roles.

by Brittany Cline

Wow, so we are now exactly halfway through our trip and here we are in Lisbon, Portugal.  Lisbon is an incredible city full of beauty and culture.  The weather here is perfectly breezy too!  Today we walked all over the city and did some amazing site seeing so it was really nice to wind down our day with enjoying our first Fado.

First, I will back track a little bit to two months ago.  When Charles said that attending a Fado was the one mandatory event that we needed to attend during our free weekend in Lisbon, I can say that I was excited even though I was not entirely sure of what a Fado really was.  Charles described it as the Portuguese analogy to America’s blues music, but wow; it is so much more.

Fado really was an experience.  Let me explain.  To me, Fado felt like a type of music that really reaches the audience’s soul.  No one in our group speaks Portuguese, yet some of us were tapping our feet and bopping our heads to the music.  How can that be when we could not even fully understand the music?  I think it was due to the enthusiasm of the singers.  The singers were so engaging and passionate, which guided us to feel the depth behind the song even without knowing the lyrics.  The crowd interaction was great too.  From the captivating eye contact to arms reaching out to the audience, I felt the soul behind the music.

There were multiple rounds of singers so we had the option of staying relatively late into the night.  After each round, some people left and more people came inside.  The restaurant was so cozy so it was amazing to see so many people arrive and pack in tight to enjoy the music.  The Fado only consisted of one person singing, one person playing guitar, and another person playing an instrument similar to the guitar.  Together, this small group was able to finesse a beautifully cultured song that pleased the crowd each time.  I see Fado as a remarkable symbol of Portugal’s nationality.  What an amazing way to immerse ourselves in Portugal’s culture!  From the late evening dinner to the crowd packed restaurant to the sound of others speaking Portuguese in the background, I have to say that the Fado was an experience we will never forget.

Oh, and let me not fail to mention the mouth watering food that was served and the incredible service.  I think I speak for the entire group when I say that the amount of bread we devoured that night was incredible.  The warm bread, the delicious salmon, and the assortment of desserts really topped off the night!

Experiencing Fado really did bring our trip to Lisbon full circle.  It was a really nice way for us to bond as an entire group.  We are so grateful for the experience--to eat and to be entertained!

Lisbon: Fado

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Lisbon: Bank of Portugal and the Money Museum

This series of posts describes a study abroad course in which students visited several central banks and talked with central bankers about how they responded to—and sometimes failed to respond to—the global financial crisis, and how they are adjusting to their new roles.

by Iliana Gonzalez

Lisbon, Portugal is a city full of marvelous attractions and welcoming citizens. In addition to being a great place to tour and enjoy the vast beaches, it also home to the Bank of Portugal, one of the central banks of the Eurozone. Upon our stay in Lisbon, we were able to visit the Bank of Portugal and learn about the changes Portugal instituted to overcome the financial crisis that began in 2007.

Initially, Portugal was not affected by the crisis that hit the United States, however, as time progressed, and Greece’s deficit continued to escalate, Portugal became affected. In the spring of 2010, Portuguese banks entirely lost access to funding in international markets. Portugal’s economy went through a lack of growth during the crisis that led to an inability to reduce their deficit. As a result, Portugal’s deficit increased immensely, and it was forced to ask for help from the European Central Bank. With the money that Portugal received as a loan, it was able to recover from the crisis and turn their deficit into a surplus.

Among the changes in the Portuguese banking system were reforms that were implemented to increase potential growth, create jobs, and improve competitiveness. Furthermore, fiscal policies were implemented to increase revenues and reduce costs. The financial system was also greatly modified to ensure the bank had enough funds, to fund its operations and in case of emergencies, and there was increased monitoring and regulation to ensure everything was in place and running accordingly.

Overall, the visit to the Bank of Portugal was an enjoyable visit full of learning, and new experiences. Throughout the presentations, we were able to enjoy some exquisite Portuguese pastries that were extremely delicious. After the presentation concluded, we were able to visit the Money Museum that is also part of the Bank of Portugal. The museum has interesting history, as it was previously a church that was restored to become the money museum. The money museum features an exhibition that demonstrates the evolution of money that has left a historic mark in Portugal.

After the presentations and the visit to the Money Museum, we were treated to lunch at a very modern restaurant in the city, and given the chance to interact with the professionals of the Bank of Portugal in a more personal and relaxed setting. The lunch consisted of delicious, traditional Portuguese food. I was able to sit by Diana Bonfim and was able to learn about her experience with the Bank of Portugal and some aspects of her personal life.

Visiting Lisbon, Portugal, turned out to be a wonderful experience. One of things I found the most striking was how kind and generous the professionals from the Bank of Portugal were with us, and how much time they put into organizing a great visit for us. Undoubtedly, Lisbon was one of my favorite places to visit throughout our tour of the Central Banks, and I am definitely planning to return to such an amazing city!

Lisbon: Bank of Portugal and the Money Museum

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