Los Angeles CA, August 4 (Tangible Investments) - by James O’Dell - Gold and Silver prices were mixed on Friday with Gold gaining $12.35 or 0.96 percent to end the week at $1,294.50 an ounce after a weaker than forecast jobs report put a damper on speculation that the Fed will raise interest rates sooner than previously thought. Silver eased $0.07 or 0.34 percent to finish the week at $20.33 an ounce, while the Gold/Silver ratio rose to 63.67.
Portuguese authorities were forced to provide 4.9 billion euros ($6.6 billion) in emergency funding to halt the collapse of one of the nation's biggest and oldest financial institutions, Banco Espirito Santo. The decision came after the bank's share price lost nearly 75 percent of its value last week following an audit that uncovered previously unreported debts. Bank of Portugal governor Carlos Costa said on Sunday that authorities felt compelled to act to prevent contagion to the rest of the Portuguese financial system.
“Shareholders, subordinated debt holders as well as board members or former board members directly involved in the more recent events, and not the taxpayers, will be called to shoulder the losses incurred by a banking business they failed to adequately oversee,” said Portugal's Finance Ministry, in a statement. The Portuguese government will use some of the 6.4 billion euros still remaining in the Bank of Portugal’s Resolution Fund, from its last financial bailout in 2011 to fund the needed injection of capital.
A new company, Novo Banco, owned outright by the fund, will receive Banco Espirito Santo’s deposit operations and most of its assets and will eventually be sold to finance the rescue. Espirito Santo shareholders and junior bondholders will be left with the problem assets, according to a statement by the central bank, while International markets are spooked that this may be just the tip of the iceberg and more financial secrets remain to be uncovered.
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