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Tortious liability of financial supervisors (including those that exercise resolution functions) in Portugal is governed by the specific tort law regime applicable to the state and other public entities in Portugal. The liability criteria provided for the tortious liability regime for the state and other public entities are largely aligned with general tort liability rules, notwithstanding some important differences in several requirements. The chief purpose of this chapter is to discuss and evaluate in practice the tortious liability of financial supervisors having regard of the institutional supervisory model adopted in Portugal, which includes the Bank of Portugal (Banco de Portugal, which is simultaneously the central bank and the financial supervisor for the banking sector, for as much as this competence is retained at national level vis-à-vis the Single Supervisory Mechanism, with resolution functions), the Portuguese Insurance and Pension Funds Authority (Autoridade de Seguros e Fundos de Pensões), and the Portuguese Securities Market Commission (Comissão de Mercado de Valores Mobiliários).

This chapter examines financial stress-testing, most notably microprudential bank stress-testing in the EU. It begins by differentiating between micro and macroprudential stress tests. Microprudential stress-testing takes place at the level of individual financial institutions (micro perspective) serving as a risk management tool used both by individual banks (to gauge risk exposures for internal purposes) and supervisors (to assess the resilience of banking institutions to adverse market developments). Meanwhile, macroprudential stress tests are a tool designed to assess the system-wide resilience to shocks to support the design and calibration of macroprudential policy with the objective to identify and reduce systemic risk. Therefore, the focus is on the system-wide resilience and not on individual resilience, with the possible application for defining the size of counter-cyclical buffers. The chapter then addresses the topic of EU-wide stress tests from three perspectives, namely (i) its implementation and the methodologies used from 2009 onwards; (ii) the outcomes of such stress-testing exercises; and (iii) a comparative analysis of EU-wide stress tests with its US and UK counterparts, also including the sensitivity scenarios developed to assess the possible effects of the COVID-19 pandemic.