Portugal rescues BES bank to avert crisis for eurozone

Portugal is launching a near 5.0-billion-euro EU-backed rescue for banking giant Banco Espirito Santo to avert a wider crisis across the financial system. Faced with the risk that the bank might crash and put the eurozone country back in danger, the Portuguese central bank announced a rescue package of 4.9 billion euros ($6.6 billion) on Sunday. Last week Banco Espirito Santo reported a first-half loss of 3.57 billion euros -- the worst ever reported in Portugal -- sending its shares plunging. Its three holding companies were already in administration. The Portuguese state will provide 4.4 billion euros of the bail-out from rescue funds already available to it under a national bailout programme from which the country had only emerged in May. In Brussels, the European Commission gave its approval, saying that the terms -- including the creation of a new bank and measures to ensure shareholders pay a heavy price -- would not distort competition, according to AFP.