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Rescript of the President of the Republic’s answer to journalist’s questions concerning the Espirito Santo Group

For purposes of transparency, following is the full rescript of the answer given by the President of the Republic to journalists’ questions concerning the Espirito Santo Group, on 21 July 2014, in Seoul.

“JOURNALIST: Mister President, how have you followed up in the last weeks the situation with the Espirito Santo Group and I would also like to ask you if you believe that this situation may have consequences for the Portuguese economy.

PRESIDENT OF THE REPUBLIC: In line with the information I have received, I consider that the Bank of Portugal, as the supervising authority, has handled this situation very properly in order to preserve the stability and soundness of our banking system.

I must refer that this question was also placed to me, in a meeting I held with a journalist. And I endeavoured to explain, and believe made it clear, the difference between the financial area of the Espirito Santo Group and the non-financial area. And, even in Portugal, there is some confusion between these two areas. The Bank of Portugal has, for some time, been adopting measures to insulate the bank, the financial area, from the financial difficulties occurring in the Group’s non-financial area. And the Bank of Portugal has been authoritative, even categorical, when stating that the Portuguese may maintain confidence in the Espirito Santo Bank, since the capital clearances are more than sufficient to cover the bank’s exposure to the non-financial area, even in the most adverse situation. And I, according to the information I have received directly from the Bank of Portugal, consider that the Bank’s and the Governor’s handling of the situation has been the most correct.

Concerning the question as to the possible effects on the Portuguese economy, there will always be some, not from the Bank itself but from the non-financial area. If some citizens, some investors, come to suffer significant losses, they may postpone investment postponements and even some of them may find themselves in very serious difficulties; for this reason, we cannot ignore that the real economy may be somewhat affected, for instance, with regard to those that placed applications in the Group’s international activities which are beyond the control of the Bank of Portugal. But I believe that, in line with the information we have, that these will not be very significant”

View below, in Multimedia, the answer of the President of the Republic.

02.09.2014
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