Goldman Sachs arranged and participated in an $835 million loan channeled via a Luxembourg-registered special purpose vehicle to a Portuguese bank -- Espirito Santo -- that was about to go bust; the loan in turn was backing an oil refinery project -- the price of oil about to crash -- in Venezuela -- a country on the verge of default.
Somehow, that loan made it into the liabilities of the "good bank" that the government of Portugal created when it broke up Espirito Santo.
The Wall Street Journal, (free link) which has been all over the story from the start, now reports that common sense has prevailed and the loan is being dumped into the bad bank, which probably can't repay it.
Goldman is of course lawyering up. It took a long time, but Europe's bank regulators might finally be on the level of who they're dealing with.
Somehow, that loan made it into the liabilities of the "good bank" that the government of Portugal created when it broke up Espirito Santo.
The Wall Street Journal, (free link) which has been all over the story from the start, now reports that common sense has prevailed and the loan is being dumped into the bad bank, which probably can't repay it.
Goldman is of course lawyering up. It took a long time, but Europe's bank regulators might finally be on the level of who they're dealing with.