After two years, the government has given the go-ahead for an agreed solution to sort out those Banco Espírito Santo depositors who were ripped off by the bank's management under Ricardo Salgado.
Confirmation was given to the association representing the group of former BES customers at a meeting this morning with the Portuguese Securities Market Commission, the Bank of Portugal and Nuno Martins from the Ministry of Finance.
The president of the BES customers’ association said that the government gave the green light to a solution that will return some of the money his members had lost.
Outside the Banco de Portugal office, around 40 BES customers protested while waiting for the outcome of the meeting.
In the end, the protestors were pleased that a decision has been reached after a two year wait and were happy their association has agreed a way forward that partially will offset the losses they suffered but held back from a full celebration as the solution will be time-consuming.
The president of the association admitted that the process of creating a compensation fund is complex and inevitably there will be many more meetings, but he was confident, "there is no turning back."
About 2,000 BES depositors lost €432 million when it turned out the ‘safe as houses’ investments they had been switched to by persuasive branch sftaff were not covered by the Bank of Portugal's €100,000 deposit guarantee scheme.
The investments turned out to be in Grupo Espírito Santo companies such as Espírito Santo International and Rioforte which all went tits up along with the rest of Ricardo Salgado’s failed empire.
Portugal's new Prime Minister António Costa has been instrumental in getting a solution hammered out.
Costa said that the resolution of the BES problem was crucial to the stability of the financial system and, on taking over as PM, said that he could not believe that ‘nobody is in charge’ – complaining that the head of the Bank of Portugal and of the Securities Market Commission both had decided to blame each other, with the result that nothing was getting resolved.
