Large creditors of BES send letter asking the Parliament to hear Carlos Costa

  • ECO News
  • 7 March 2018

Once again, large funds like Pimco and BlackRock go after Carlos Costa, governor of the Bank of Portugal, because of the re-transfer of bonds from Novo Banco to bad BES in 2015.

The group of large international investors, including Pimco and BlackRock, sent a letter to Portuguese deputies asking for a Parliamentary hearing with the governor of the Bank of Portugal, Carlos Costa. Those investors made this request because of the impact the bond re-transfer from Novo Banco to bad BES, in December of 2015, had for Portuguese taxpayers.

“The Portuguese taxpayers suffered clear and serious losses from the action taken by the Bank of Portugal, which were unmistakably ignored when the assessment of the re-transfer decision was made, but it seems that it has not been fully seized by the Portuguese authorities”, the Novo Note Group stated, in a letter sent to Parliament deputies, accessed by ECO.

Those funds, who lost almost their full investments when five bond series were transferred from Novo Banco to bad BES, estimate that the decision made by the Bank of Portugal costed around 2.2 billion euros to the Portuguese treasury in 2016 and 2017 alone, assuming additional costs from higher interests than Portugal had to bear for debt issuances it made in the past two years.

Therefore, and in addition to the negative impact this decision had and continues having in Portuguese banks, those investors state that “the parliamentary hearing with the governor is key to clarify the true extension of the damage caused by the re-transfer decision”. “The financial and economic impact, mostly sustained by the public Treasury and Portuguese taxpayers, must be taken into consideration by those in charge of the country and must be made clear to the Portuguese citizens”, the Novo Note Group argues, which is coordinated by Pimco, BlackRock, Attestor Capital and CQS.