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.