BES, banco espirito santo falls. why?

Who is BES? This is quite an easy question to answer: it’s the 2nd largest private financial institution in Portugal and the 9th company in PSI, ordered for capitalization.
Ok. Someone can explain this?


Take a look at the volumes below the chart (…)

Key facts:

  • 9th of July, Downgrade by Moody’s to Caa2 from B2;
  • 10th of July, the market doubts about capacity of Bes to contain the missed payments;
  • 18th of July, Portugal’s Central Bank tests Santander interest in investing in Bes;
  • 19th of July, Bes aks for help (is it too late?);
  • 22th of July, Central Bank asks to Bes for a urgent and anticipated appointment of new CEO and CFO.

Firsts Consequences on financial markets:

  1. Bund rates fall again to record low-Yield
  2. Bond rates jumps
  3. Reputational Damage
  4. Consequences on Portugal (we don’t want new bailouts, I don’t think we will have a new Bankia treatment.