Document details

The good, the bad and the ugly: The fall and resolution of Banco Espírito Santo

Author(s): Morais, Luís Pedro Rodrigues Teles de Belo

Date: 2015

Persistent ID: http://hdl.handle.net/10362/15347

Origin: Repositório Institucional da UNL

Subject(s): Corporate governance; Bank regulation; Bank resolution


Description

This case study – and accompanying teaching note – briefly describes the history of the Espírito Santo family, a banking dynasty who led one of Portugal’s leading economic and financial groups, along with its “crown jewel”, Banco Espírito Santo. It chronicles how the corporate governance issues at BES allowed the family to exploit the bank, its shareholders and its customers, so as to support its unprofitable non-financial businesses. This left the bank in a poor financial situation, which deteriorated beyond control, leaving regulators – whose actions are also analysed here – with no alternative, amidst a severe liquidity crisis, but to apply a resolution measure, pinning large losses on junior bondholders and shareholders before recapitalising the bank.

Document Type Master thesis
Language English
Advisor(s) Pinho, Paulo
Contributor(s) Morais, Luís Pedro Rodrigues Teles de Belo
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