From Antonio Nogueira, a 66-year-old retiree, as quoted in a Wall Street Journal article, “Espírito Santo Clients Are Back on the Hook,” 3/6/15:
My world has fallen apart. I trusted my bank manager, and then the bank’s promises to pay me back. Now, I’m left with nothing.
Banco Espírito Santo is a Portuguese bank that sold an estimated €550 million of parent-company Espírito Santo’s unsecured commercial paper. Espírito Santo is the holding company for a conglomerate that imploded last year. A successor bank to Banco Espírito Santo, Novo Banco, said on its website that investors would be made whole, and the central bank, the Bank of Portugal, echoed that assurance in emails to some of the investors. Now both institutions have backtracked. If investors get anything, it will be a few cents on the euro. Mr. Nogueira may have read and believed marketing documents, which, according to the Journal story, said that investors’ capital and interest were guaranteed at expiration of the commercial paper. Mr. Nogueira invested his life savings, €100,000 (about $100,000) and is now living on a monthly pension of €200. This is one of the first big bank failures of Europe’s Financial Crisis, Part 2, to be followed by many more, and many more sad stories like Mr. Nogueira’s.
