Back in July, Goldman lent A Portuguese bank $951 million, via Oak Finance Luxembourg. Now, Goldman Sachs has announced it intends to “pursue all appropriate legal remedies without delay, ” after the Bank of Portugal on Tuesday reaffirmed its decision to keep the loan in a “bad bank.”
A bad bank is a corporate structure created to isolate high risk securities. When a bank accumulates a large portfolio of debts, making it difficult for the bank to raise capital. So the bank segregates its “good” assets from its “bad” assets by creating a bad bank.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at [email protected].
Thank you.
Of course, once a lender’s debt has gone into this bad bank, the lender, in this case Goldman Sachs, can probably kiss it good bye.
Which explains why a spokeswoman for Goldman Sachs announced on Tuesday that “the Bank of Portugal’s decision not to restore Oak Finance’s obligations … is based on factual errors and violates basic principles of due process and fairness.”
Because they want their money back.
“We intend to pursue all appropriate legal remedies without delay, ” the spokeswoman added.
For its part, the Central Bank of Portugal said in a statement: “Evidence provided by Goldman Sachs International has not removed the reasons for doubt, in fact and in law, on which the Bank of Portugal’s decision of 22 December was based.”
That’s Bankese for, “I’m over here, you’re over there, try to catch me.”
The bank added: “Any remaining doubts can be resolved only in court, as the Bank of Portugal cannot, when there is doubt, allow a transfer to go ahead, which, in practical terms, would be irreversible, at the serious risk of causing irreparable harm to the public interest.”
Which, if you speak Bankese, means: “I’m a country, you’re a freaking bank, you think you’re bigger than me?”
Goldman responded that the Portuguese decision was “based on factual errors and violates basic principles of due process and fairness, ” promising that legal action would follow.
The Financial Times thinks Goldman is going to start legal proceedings in England and Portugal, “including immediate suspension of the decision.”
Good luck, really.
