Portugal Aids Second Bank in Difficulty

Portuguese authorities seized control of Banco Privado Português SA, providing emergency funding for the troubled unlisted bank, The Wall Street Journal reported today. The seizure Tuesday was coordinated among Portugal's finance ministry, the Bank of Portugal and six of the country's largest banks, the central bank said. BPP is the second Portuguese bank to face liquidity problems as a result of the global financial crisis. Last month, Portugal nationalized unlisted Banco Português de Negócios SA after the bank recorded huge losses. Under the plan, the banks will provide a €450 million ($567 million), six-month loan that will allow BPP to meet its obligations to depositors and creditors. The loan will be guaranteed by the Portuguese state and can be extended if necessary, the central bank said. BPP had earlier tried to get the Bank of Portugal to grant it a state guarantee for a €750 million loan, but that request was turned down. Read more. (Subscription required.)