Bloomberg News

Portugal Does Not Rule Out Use of Bank Recapitalization Funds

October 26, 2011

Oct. 25 (Bloomberg) -- Portuguese Prime Minister Pedro Passos Coelho does not rule out the possibility of a bank using funds that have been set aside for recapitalization of lenders.

“It seems to me that it will be difficult that all the banking industry can do without accessing this possibility,” Passos Coelho said today at a conference in Lisbon. “The state does not intend to get involved in the management of banks, it does not intend to nationalize banks or become an owner of banks.”

Portuguese banks are required to reach a core Tier 1 capital ratio of 9 percent this year and 10 percent in 2012 as part of the country’s bailout package with the European Union and the International Monetary Fund. The aid program totals 78 billion euros, of which 12 billion euros are earmarked for the recapitalization of lenders should that be necessary.

To contact the editor responsible for this story: Joao Lima at jlima1@bloomberg.net


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