Shares and bonds in Portugal’s second-largest bank, Espirito Santo, fell further today after the country’s central bank ordered immediate management changes and its troubled parent company sold a large stake.
In London, the Financial Conduct Authority extended the ban on short-selling Espirito shares or their derivatives which it imposed on Friday for a further two days.
Espirito shares fell 0.4 eurocents in Lisbon to 44.1 eurocents (35p). They lost 36% last week triggering fears the eurozone banking crisis may re-emerge.
German Chancellor Angela Merkel said last week’s turmoil underlined the eurozone’s fragility.
“The example of a Portuguese bank showed us... how quickly the so-called markets are roiled, how quickly uncertainty returns and how fragile the whole euro construction still is,” she said.
Banco Espirito Santo’s parent company sold a 5% holding cutting the founding family’s stake to 20% today. The bank also brought forward Vitor Bento’s appointment as its first non-family CEO.
Junior London forex traders are being offered immunity by US prosecutors if they provide proof of foreign-exchange market rigging.
