Carlos Costa, the current governor of the Bank of Portugal looks increasingly like a man in need of a new job as it emerges that he knew of the black hole in Banco Espírito Santo’s account as far back as December 2013.
The serious problems at BES were only revealed in April 2014 when it was announced that Ricardo Salgado (pictured) justified the loss as being an "accounting error," but error or not, it was enough to bring down the bank.
An exchange of letters between the supervisor and Salgado, revealed in today’s Expresso, shows that on December 10, 2013 the Bank of Portugal had knowledge of a black hole of €1.3 billion at Espírito Santo International.
However, the governor of the Bank of Portugal saw fit to conceal this news until April this year by which time, conveniently, a prospectus for a capital increase for BES had been published which did not refer to any such problem in the Espírito Santo empire.
In a letter sent by the deputy governor of the Bank of Portugal on December 23, 2013 he asks for explanations about this hole in the accounts and requires protective measures rapidly to be put in place at Grupo Banco Espírito Santo, measures which Salgado never applied.
The rest is living history as the investigation into Salgado and other family members controlling the various Espírito Santo companies continues.