Novo Banco bailout - taxpayers liable for another €850 million

The Resolution Fund needs €300 million of its own money, plus a taxpayer loan of €850 million, to hand over Novo Banco, controlled by the US vulture fund, Lone Star.

The shocking call for yet more cash to cover property write downs, as agreed by the Bank of Portugal’s governor, Carlos Costa, is €1.15 billion.

"The Resolution Fund will use, first and foremost, the financial resources available, resulting from contributions paid directly or indirectly by the banking sector. These resources will be complemented by the use of a loan agreed with the State in October 2017, with an annual ceiling of €850 million," according to a statement by the Fund, led by Luís Máximo dos Santos.

The Resolution Fund, which somehow became responsible for the capitalisation of Novo Banco, under a mechanism agreed when 75% of the bank was sold for €0, has a maximum liability set at €3,890 million.

The Governor of the Bank of Portugal told a parliamentary committee that funding of privately owned Novo Banco was a result of the negotiations between the State and the European Commission during the austerity years, but nobody really believes him.

Comments  

0 #3 nogin the nog 2019-03-05 14:30

Quoting Peter Booker:

So money is going out of my pocket as a taxpayer in Portugal, straight into the account of the owners of Lone Star. The unacceptable face of capitalism - oh no, that is Carlos Costa.

HMM
We are forgetting peter. The Government are
in full control of this Lunatic. I am sure they will come up with some new rules protecting us from men like this..

0 #2 John Stoddart 2019-03-05 08:48

Over the last few years there has been stuttering attempts by the ECB in Frankfurt to do away with 'historical flag ship' banks in the less relevant peripheral EU states. Clearly, given that Portugal has long been over banked there is no reason, except sentiment to keep BES a.k.a Novo Banco going. Maybe this is Lone Star's longer term aim for which they will get the ECB's thanks and trouser hundreds of millions beforehand.

0 #1 Peter Booker 2019-03-05 08:31

So money is going out of my pocket as a taxpayer in Portugal, straight into the account of the owners of Lone Star. The unacceptable face of capitalism - oh no, that is Carlos Costa.

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