RegAlert2026-07-15
Added · Updated
Supervisory Expectations on Geopolitical Risk Management
The Banco de Portugal establishes supervisory expectations for institutions under its supervision regarding the identification, assessment, and management of geopolitical risk. Institutions must integrate geopolitical risk into their internal governance, capital and liquidity planning, stress testing, and operational resilience frameworks. The circular outlines specific practices across four dimensions: internal governance and risk management, capital and liquidity planning, stress testing and sensitivity analysis, and operational resilience, requiring institutions to adapt these expectations based on their specific characteristics and the principle of proportionality.
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Carta Circular No. CC/2026/00000019
Mod. 99999975/T – 01/14
Subject: Supervisory expectations on practices to be considered by institutions in the identification, assessment, and management of geopolitical risk
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In accordance with the legislation and regulation in force¹, institutions must identify, assess, and manage all risks to which they are or may become exposed in a prudent manner, proportional to the scale and complexity of their business models and operations.
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Geopolitical risk, in the context of this Circular Letter from the Banco de Portugal, refers to the probability of occurrence and impacts resulting from the threat, realization, and intensification of adverse events associated with wars, terrorism, and any tensions between States and political agents that affect the peaceful course of international relations and, thus, disrupt economic activity, financial markets, or business operations.
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Lineage: In force
Source: Banco de Portugal — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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