{"id":9882,"date":"2016-07-25T11:30:55","date_gmt":"2016-07-25T08:30:55","guid":{"rendered":"http:\/\/bestinsurance.gr\/a1\/?p=9882"},"modified":"2016-07-25T10:23:33","modified_gmt":"2016-07-25T07:23:33","slug":"first-italy-now-portuguese-banks-unexpectedly-need-a-taxpayer-bailout","status":"publish","type":"post","link":"https:\/\/bestinsurance.gr\/a1\/archives\/9882","title":{"rendered":"First Italy, Now Portuguese Banks &#8220;Unexpectedly&#8221; Need A Taxpayer Bailout"},"content":{"rendered":"<div data-animation=\"no-animation\" data-icons-animation=\"no-animation\" data-overlay=\"\" data-change-size=\"\" data-button-size=\"0.7\" style=\"font-size:0.7em!important;display:none;\" class=\"supsystic-social-sharing supsystic-social-sharing-package-flat supsystic-social-sharing-content supsystic-social-sharing-content-align-left\" data-text=\"\"><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed facebook\" target=\"_blank\" title=\"Facebook\" href=\"http:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F9882\" data-main-href=\"http:\/\/www.facebook.com\/sharer.php?u={url}\" data-nid=\"1\" data-name=\"\" data-pid=\"1\" data-post-id=\"9882\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-facebook\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed twitter\" target=\"_blank\" title=\"Twitter\" href=\"https:\/\/twitter.com\/share?url=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F9882&text=First+Italy%2C+Now+Portuguese+Banks+%26%238220%3BUnexpectedly%26%238221%3B+Need+A+Taxpayer+Bailout\" data-main-href=\"https:\/\/twitter.com\/share?url={url}&text={title}\" data-nid=\"2\" data-name=\"\" data-pid=\"1\" data-post-id=\"9882\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-twitter\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><\/div><p>First Italy, Now Portuguese Banks &#8220;Unexpectedly&#8221; Need A Taxpayer Bailout.Last December 30, creditors in Portugal&#8217;s Novo Banco received a very unpleasant parting present to 2015: a bail-in, which sent their bonds crashing from just shy of par to barely above worthless.<\/p>\n<p dir=\"ltr\"><a href=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user92183\/imageroot\/2015\/12\/20151230_NOVBNC.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user92183\/imageroot\/2015\/12\/20151230_NOVBNC_0.jpg\" width=\"600\" height=\"294\" \/><\/a><\/p>\n<p>As a reminder, <a href=\"http:\/\/www.zerohedge.com\/news\/2016-01-14\/creditors-accuse-portugal-unfair-populist-short-cut-%E2%82%AC2-billion-bank-bail\">Novo Banco was the \u201cgood\u201d bank <\/a>forged from the ashes of Banco Espirito Santo which had to be bailed out by the state in August of 2014. The idea was to sell Novo Banco to pay for the cost of the bailout, but the auction process eventually floundered amid turmoil in Chinese markets (at least two of the potential bidders were Chinese) and uncertainty about whether this \u201cgood\u201d bank would in fact need more capital given the elevated level of NPLs already on its books.<\/p>\n<p>Then last November, the ECB told Novo it would need to raise some \u20ac1.4 billion in fresh capital which the bank initially said would come from asset sales. A little over a month later, Portugal\u2019s central bank essentially just gave up. On December 29, the bank announced it was transferring \u20ac2 billion in NB senior notes back to Banco Espirito Santo which, like a ghost skyscraper in China, is set for demolition. In other words, Novo Banco plugged the \u20ac1.4 billion hole by essentially declaring \u20ac2 billion in bonds null and void.<\/p>\n<p>Fast forward six months later, and Novo Banco is set to be the gift that keeps on giving&#8230; even more terrible news.<\/p>\n<p><a href=\"http:\/\/www.ft.com\/cms\/s\/0\/1a4894e2-5197-11e6-9664-e0bdc13c3bef.html\">According to the FT<\/a>, Portuguese banks, already undercapitalised and loaded with bad debt, <strong>are bracing for even more heavy losses from Lisbon\u2019s so far unsuccessful attempts to sell Novo Banco<\/strong>.<\/p>\n<p>Estimates of the potential bill facing banks, which finance the resolution fund that bailed out Novo Banco in 2014, range from \u20ac2.9bn to \u20ac3.9bn. <strong>Some bankers are even doubtful that the rescued lender will attract any acceptable offers, leading to its possible break-up or liquidation<\/strong>.<\/p>\n<p>Maybe. Or maybe we we will the first case of a &#8220;bad bank squared&#8221; &#8211; it would be hardly surprising considering Italy is about to bail out its already repeatedly bailed out banking sector&#8230; again.<\/p>\n<p>According to the FT, the sale of Novo Banco is among critical decisions that will shortly determine the future shape of Portugal\u2019s banking industry, which the International Monetary Fund has linked with the problems facing Italian lenders as among potential risks to global growth.<\/p>\n<p>It&#8217;s not just the tragic ghost of Nova Banco that is haunting Portugal, and the rest of Europe. Lisbon and EU authorities are locked in tough negotiations over plans to recapitalise state-owned Caixa Geral de Dep\u00f3sitos, Portugal\u2019s largest bank, with conflicting estimates of its capital needs ranging from about \u20ac2bn to \u20ac5bn. The Bank of Portugal and Lisbon\u2019s eight-month-old \u201canti-austerity\u201d government are also calling for a \u201csystemic solution\u201d to deal with more than \u20ac30bn in bad debts and problem assets, adding to other calls for public bailouts of troubled EU banks.<\/p>\n<p>But wait, there&#8217;s more.<\/p>\n<p>In a recent report, Barclays estimated that Portuguese lenders could need up to \u20ac7.5bn to resolve a \u201csystemic banking crisis\u201d that was bringing the country under \u201cclose market scrutiny\u201d.<\/p>\n<p>In other words just like Italy &#8220;unexpectedly needs a \u20ac50 billion (to start) bailout, &#8220;suddenly&#8221; Portugal also seems to need a \u20ac7.5 billion (to start) bailout.<\/p>\n<p>As the FT adds, &#8220;investors fear the capital needs of banks could further burden the public finances of a struggling country already facing potential EU sanctions for failing to meet deficit targets.&#8221;<\/p>\n<p>Actually, judging by historical precedent,\u00a0 &#8220;fear&#8221;\u00a0 is not the right word for what investors feel when it comes to taxpayer bailouts.<\/p>\n<p>\u201cSome banks are in need of a large capital injection,\u201d said Antonio Garcia Pascual, chief European economist with Barclays. \u201c<strong>This means any material losses from the sale of Novo Banco could end up having to be met by the sovereign, as the capacity of Portuguese banks to absorb them is rather limited<\/strong>.\u201d And when Antonio says &#8220;the sovereign&#8221;, <strong>he means taxpayers.<\/strong><\/p>\n<p>Meanwhile, Eduardo Stock da Cunha, Novo Banco\u2019s outgoing chief executive, is already setting the stage for the doomsday scenario should his bank not get taxpayer funding, and has warned of potential big losses on the sale, drawing a comparison with Millennium BCP, Portugal\u2019s largest listed bank, whose shares have dropped more than 60 per cent this year and which has a market value of just over \u20ac1bn.<\/p>\n<p>\u201cPortugal has to be realistic about Novo Banco when BCP is trading at a price\/book value of around 0.4 and southern European banks in general at 0.5,\u201d said a Lisbon banking analyst.<\/p>\n<p>In other words, while Italy debates whether or not to be brave enough to ask Germany to greenlight a much needed \u20ac50 billion bailout, little Portugal may steal all its glory&#8230; and in the process unleash the latest &#8211; if not last &#8211; wave of taxpayer bailouts across Europe all over again.<\/p>\n<p>&nbsp;<\/p>\n<p>Source: <a href=\"http:\/\/www.zerohedge.com\/news\/2016-07-24\/first-italy-now-portuguese-banks-unexpectedly-need-taxpayer-bailout\" target=\"_blank\">link<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<div data-animation=\"no-animation\" data-icons-animation=\"no-animation\" data-overlay=\"\" data-change-size=\"\" data-button-size=\"0.7\" style=\"font-size:0.7em!important;display:none;\" class=\"supsystic-social-sharing supsystic-social-sharing-package-flat supsystic-social-sharing-content supsystic-social-sharing-content-align-left\" data-text=\"\"><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed facebook\" target=\"_blank\" title=\"Facebook\" href=\"http:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F9882\" data-main-href=\"http:\/\/www.facebook.com\/sharer.php?u={url}\" data-nid=\"1\" data-name=\"\" data-pid=\"1\" data-post-id=\"9882\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-facebook\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed twitter\" target=\"_blank\" title=\"Twitter\" href=\"https:\/\/twitter.com\/share?url=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F9882&text=First+Italy%2C+Now+Portuguese+Banks+%26%238220%3BUnexpectedly%26%238221%3B+Need+A+Taxpayer+Bailout\" data-main-href=\"https:\/\/twitter.com\/share?url={url}&text={title}\" data-nid=\"2\" data-name=\"\" data-pid=\"1\" data-post-id=\"9882\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-twitter\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><\/div><p>First Italy, Now Portuguese Banks &#8220;Unexpectedly&#8221; Need A Taxpayer Bailout.Last December 30, creditors in Portugal&#8217;s Novo Banco received a very unpleasant parting present to 2015: a bail-in, which sent their bonds crashing from just shy of par to barely above worthless. As a reminder, Novo Banco was the \u201cgood\u201d bank forged from the ashes of<\/p>\n","protected":false},"author":1,"featured_media":9883,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-9882","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-1"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/9882","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/comments?post=9882"}],"version-history":[{"count":1,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/9882\/revisions"}],"predecessor-version":[{"id":9884,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/9882\/revisions\/9884"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media\/9883"}],"wp:attachment":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media?parent=9882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/categories?post=9882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/tags?post=9882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}