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I express a word of absolute repudiation for the attitude shown by those who refused to come here to give their testimony, with special emphasis on the governor of the Bank of Portugal , who, being an official of the State and the region being part of the same State, refused to appear.

Comments made by Carlos Rodrigues, president of the Banif Commission of Inquiry, on the refusal of the governor of the Bank of Portugal to make statements to the Madeiran deputies, ECO Economia Online, 21 March 2018.


226: The Commission notes that Novo Banco appears to be suffering from significant deficiencies in its Management Reporting capabilities.


230: The credit file review performed by the Commission fully confirms the findings in the loan tape, namely that past lending practices of BES have contributed to its demise. But it also indicates that even after the establishment of the bridge bank and under direct control of the Bank of Portugal, Novo Banco seems to have done little to remedy previous problematic lending practices or substandard credit risk management.


265: Regarding loss recognition in the legacy portfolio and the corporate culture of Novo Banco which suggests that arbitrary lending decisions as well as suboptimal or absent risk management has been endemic in Novo Banco also under the ownership of Bank of Portugal, the Commission considers it necessary to clean up the balance sheet as soon as possible.

European Commission’s State Aid to Novo Banco Decision, 11 October 2017.


This is a classic example of the goalposts being moved yet again in an unpredictable fashion.

Tim Skeet, chairman of the International Capital Markets Association’s working group on bail-in  via Financial Times, 7 January 2016.


The Bank of Portugal has been categorical in asserting that the Portuguese can trust BES, given that the extra capital is more than enough to cover the bank's exposure to the non-financial part, even in the worst case scenario (…). If investors have to bear significant losses they might postpone investment decisions or even find themselves in very dire difficulties; therefore, we cannot ignore that this can have some impact on the real economy.

Answer given by the President of the Portuguese Republic to journalists’ questions concerning the Espirito Santo Group in Seoul, 21 July 2014.


Pimco e fundo soberano do Kuwait processam Estado Português

Plataforma Online, 14 December 2018


Fundos internacionais e a IBM entraram com uma ação judicial contra Portugal

RTP 3 - 18/20, 13 December 2018


Pimco e fundo soberano do Kuwait processam Estado por causa do Novo Banco

Dinheiro Vivo Online, 13 December 2018


Pimco e fundo soberano do Kuwait processam Estado Português

Diário de Notícias Online, 13 December 2018


Pimco, IBM e fundo soberano do Kuwait processam Portugal

ECO - Economia Online, 13 December 2018


Pimco, fundo soberano do Kuwait e IBM processam Estado por causa de dívida do BES

Expresso Online, 13 December 2018


Fundos lesados com obrigações sénior do Novo Banco em 2015 põem ação contra o Estado no Tribunal Administrativo

Jornal Económico Online (O), 13 December 2018


Pimco, fundos do Kuwait e da IBM processam República Portuguesa

Negócios Online, 13 December 2018


Pimco, fundo soberano do Kuwait e plano de pensões da IBM processam República Portuguesa

Sábado Online, 13 December 2018


The [Portuguese] central bank wiped out Portuguese law bonds, leaving those under international law untouched. This meant the ongoing legal process is taking place in the Portuguese courts.

The The Novo Banco saga continues, Financial Times, 28 June 2018.


The Bank of Portugal says EU rules allow it to treat the affected bondholders differently to other foreign, albeit European, creditors…it argued that even if there had been discrimination, it would be “abundantly justified” in order to safeguard the financial system.

Bloomberg, 20 June 2018.


The Portuguese economy and financial system are still in a fragile position. If the markets shake, we should have funds like BlackRock and Pimco on our side and not against us. It would thus be advised that the Portuguese State would reach an agreement with these two funds, and other smaller ones, in the coming months. If the storm returns to the markets, we need allies, not opponents.

The Portuguese State must make an agreement with BlackRock and Pimco,, 3 April 2018. 


...some leading members of the Socialist government have already raised questions over the central bank’s decision, which was made before they came to power.

Novo Banco bondholders want Portugal bank chief quizzed over bond transfer, Reuters, 8 March 2018. 


The Bank of Portugal decided to move certain Novo Banco bonds back into BES days before the new bank resolution rules took effect in 2016. That breach of the basic principle of pari passu, that all investors in a specific class should be given equal treatment, took the affected bondholders by surprise.
Since then the Bank of Portugal has not bothered to continue negotiations with the aggrieved bondholders, who were moved back to BES.

Latvia test for Eurozone bank resolution regime, Reuters (IFR), 23 February 2018.


The move was controversial. Of Novo Banco’s 52 senior bonds, 47 escaped being transferred back to the failed lender Banco Espirito Santo, laying waste to the hitherto sacrosanct market principle that holders of the same asset class should retain equal standing within the resolution hierarchy.

Talk is cheap, resolutions are not, GlobalCapital, 23 January 2018.


What is clear from the Novo Banco incident is the centrality of the “public interest”, which is divined by technocratic bodies, often working confusingly in tandem with one another…This principle and its associated circularity clearly invites conflict with conventions surrounding the rule and processes of law.
Arguably, the Bank of Portugal acted in a hurried manner, to time its move before the SRB would assume power over such decisions.
The Novo Banco case…should provide extremely important precedents regarding the capacity of the “public interest” to overwhelm contractual claims or the benefits afforded by legal processes (in this case, pari passu in particular)…. The Bank of Portugal will need to show it did act in the “public interest”, whatever that means.

The Novo Banco debacle and the rule of law in Europe, Financial Times, 19 January 2018.


The widening of interest rate spreads following everything that happened in December 2015 in Portugal…had an impact of hundreds of millions of euros in increased costs for the financing of the Republic during 2016 and a good part of 2017.

Comments made by Portuguese Finance Minister Mario Centeno says at a parliamentary hearing in Lisbon, Bloomberg News, 10 January 2018.


Once the dust settles, regulators have to be able to show that creditors who lost money aren't worse off than they would have been if the bank had been liquidated in insolvency.

Why a Legal Wrangle in Portugal Raises Big Questions for European Banks, WSJ Heard on the Street, 06 April 2016


Yet a bank can hardly function if creditors live in fear of being juggled from a solvent bank to an insolvent one. The bigger issue is that the transfer was unfair: it deliberately spared domestic and retail creditors, and benefitted Novo's equity, held by the Portuguese resolution fund.

Portugal can gain if it loses Novo Banco battle, Reuters (Breakingviews), 05 April 2016.


Yet all this could be avoided, if only the Bank of Portugal would lose a little of its bloody-mindedness.
… They’ve pointed out that this both sets a dangerous precedent and hobbles confidence in the new European bank resolution regime right at the outset. Pretty much everyone is agreed on this…But not the Bank of Portugal, which will not admit that it has made a mistake.

Novo Banco: Fixing the Bank of Portugal’s mistake, Financial Times, 29 January 2016


What is clear is that in the case of Novo Banco, the ECB itself has concluded that the bank was solvent and in no need of another resolution, leaving no legal and economic rationale behind the radical course of action undertaken by the Portuguese authorities...

Discrimination at Portuguese bank Novo Banco sets a dangerous precedent, Financial Times, 12 January 2016


From a sector perspective, the Portuguese banking sector has almost become uninvestable because of what has happened.

Marc Stacey, portfolio manager at BlueBay Asset Management via Financial Times, 12 April 2017.


To some extent, the authorities are now reaping what they planted...The biggest mistake was that the interests of the senior investors were not held in high consideration from day one.

Sam Theodore, head of financials at Scope Ratings via Financial Times, 12 April 2017.


Time after time, US investors brought up [at Davos] the uncoordinated Portuguese decisions as a negative for investing in Portugal and pose a question mark for investing in some peripheral banks too (and the moves in these asset prices support this ... Many echoed the arguments made by Pimco’s Philippe Bodereau in his FT OpEd, “Discrimination at Portuguese bank Novo Banco sets a dangerous precedent”, January 12, 2016.

Huw van Steenis, Schroders/Morgan Stanley via Financial Times, 25 January 2016.