The Swiss financial regulator, Finma, is to press ahead with the forced liquidation of the local subsidiary of Banco Espírito Santo due to its ‘excessive debt'.
“On September 19, 2014, the Swiss Financial Market Supervisory Authority began bankruptcy procedures against Banque Privée Espírito Santo” according to a statement issued today which added that the regulator estimated it would be possible to reimburse client deposits “swiftly and to their full amount.”
The announcement comes on the same day that Portugal's Communist Party (PCP) wants to see a debate and a vote on setting up a commission of inquiry into the failed BES bank.
The Swiss move is not long after last week's action by the Dubai authorites which froze transactions at Espírito Santo Bankers Dubai which has rendered it unable to operate.
The Swiss timing is perfect as the problem in Dubai was the non return of a loan from Banque Privée Espírito Santo in Switzerland.
Whatever money is left in the Swiss bank will be distributed to depositors. Whether this includes Espírito Santo Bankers Dubai remains to be seen.
Portugal’s Communist Party called for a commission to study the “process that led to the application of the bail out (of BES) and its consequences as regards developments and options for Espírito Santo Group.”
The Bank of Portugal took control of BES on August 3rd 2014 following quarterly losses of €3.6 billion. Thje Bank of Portugal then divided the bank into a ‘bad bank’ containing the toxic assets owned by shareholders, and into 'good bank' Novo Banco that retains the assets that the authorities hope can be sold off to get at least some of the bailout cash back.
Espírito Santo subsidiaries may also attract attention of regulators in Spain, Libya, France, Macau, Miami, Angola, UK, Brazil, Poland and numerous offshore tax havens.
