Calm After a Bank’s Collapse in Portugal Could Signal Eurozone Resiliency

The New York Times: International Business

The collapse of the Portuguese bank seemed to have all the makings of a disaster. With little warning, a government in one of Europe’s most financially weak countries was suddenly confronted with a multibillion-euro rescue of Banco Espírito Santo. ... Analysts were wary on Monday of drawing too much reassurance from the relatively orderly way that Portuguese and European Union regulators managed the rescue. The government of Portugal was able to draw on funds already set aside as part of an international bailout of the country. But countries like Italy, which also has a weak economy and many ailing banks, do not have such readily available funds. “If the problem is too big and the country is too weak, it might be difficult,” said Bert Van Roosebeke, head of financial markets at the Center for European Policy, a research group in Freiburg, Germany. ...read more