What were they thinking? NZ government super fund loses the lot on loan to already failing bank in one of the PIGS.

Portuguese bank

A Portuguese bank on the verge of collapse – what were they thinking?

That would have been the response of many newspaper readers this morning upon learning the New Zealand Superannuation Fund has lost nearly $200 million in taxpayers’ cash on a "risk-free" loan it provided to Lisbon-based Banco Espirito Santo (BES) on July 3.

The loan – part of a US$784 million credit package US investment bank Goldman Sachs put together through its Oak Finance vehicle – was made exactly one month before Portugal’s central bank broke up BES and split the country’s biggest lender into two, with one part holding the good assets and the toxic assets placed in the other.

Unfortunately, the Oak Finance loan is now stranded in the so-called "bad bank" following a retrospective law change by the Bank of Portugal.

Christopher Adams: What were they thinking? – Business – NZ Herald News.

Portuguese junk bonds bank of New Zealand super

This is what the 2015 index of Economic Freedom has to say about Portugal on the rule of law:

In 2013, the OECD expressed concern over Portugal’s reluctance to crack down on foreign bribery, particularly in regard to its former colonies Brazil, Angola, and Mozambique.

Since 2001, Portugal had officially acknowledged only 15 bribery allegations, and there had been no prosecutions. The judiciary is constitutionally independent, but staff shortages and inefficiency contribute to a considerable backlog of pending trials.

2014 index of economic Freedom

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