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    • Thu, Jul 10, 2014 - 04:38pm

      Carlos Perneta

      Carlos Perneta

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      Joined: Jan 26 2009

      Posts: 23

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      Clarification needed

    I have seen a lot of news saying the bank is insolvent. That´s not quite right.

    The problem with the Espirito Santo Group is mostly related with the holding company of the bank and insurance business (ESFG) , which itself has a problem related to commercial paper of the holding company of the family (ESI). The bank (BES), was used as a vehicle to sell these securities to costumers but the holding company (ESFG) has already booked a provision to refund the costumers.

    The insolvent companies in the group are ESI and ESFG. The bank itself just recently raised around 1 Bn Euros in a equity offering and, according to the new solvency ratios/rules it is quite above the required thresholds.

    I mean, we all know all banks are insolvent in the long run, because of the exponential credit system. But BES is not any more or less insolvent than any other regular bank, at least for now.


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