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Portugal central bank meets to choose new BES management

Published on 14/07/2014

Portugal's central bank held an extraordinary meeting on Sunday with the board of directors of Banco Espirito Santo (BES) to begin the formation of a new management team, it said in a statement.

Financial authorities are seeking to fill the power vacuum at the head of Portugal’s biggest listed bank, which is being hammered by its parent group’s debt troubles.

“To strengthen the confidence of customers, employees and the public, it is essential that the executive committee of BES be replaced as soon as possible by a new team,” the central bank said.

Ricardo Salgado stepped down as BES chairman in June after 23 years in charge following the discovery of accounting irregularities. He will be replaced by Victor Bento, a respected economist formerly of the Bank of Portugal.

Lisbon stock market regulators had suspended trading in BES shares on Thursday after they plunged by more than 17 percent, but the ban was lifted on Friday after authorities managed to ease market fears.

Concerns that the bank’s woes could have a wider impact in Portugal — which just two months ago exited a three-year, 77 billion euro ($106 billion) international bailout — had rocked global markets as questions resurfaced over eurozone debt.