Portugal’s Insolvent Banco Espirito Santo To Be Bailed Out, Existing Equity To Be Wiped Out

Portugal’s Insolvent Banco Espirito Santo To Be Bailed Out, Existing Equity To Be Wiped Out (ZeroHedge, Aug, 3, 2014):

  • Portugal may use the Resolution Fund to recapitalize Banco Espirito Santo, Diario Economico reports, citing unidentified people linked to the process.
  • Resolution Fund may inject more than €3 billion
  • A “bad bank” may be created for the toxic assets of the credit portfolio
  • Solution aims to rescue Banco Espirito Santo without spending taxpayers’ money, and is being prepared by the government and the Bank of Portugal
  • From Aug. 4, Banco Espirito Santo will leave the stock market and will be 100% owned by the Resolution Fund, an entity created in 2012 and financed by Portuguese banks and by revenue from the special contribution that the banking sector pays the Portuguese state

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