Top Portugal banks threaten to shun govt bonds

LISBON: Portugal's biggest banks will stop buying government bonds and are urging the caretaker administration to seek a short-term loan to secure financing until a June 5 election, business daily Jornal de Negocios reported on Tuesday.

The heads of Banco Espirito Santo, Millennium bcp and Banco BPI met with the governor of the Bank of Portugal on Monday to pass on their views, Jornal said.

Nobody at the central bank was immediately available to comment on the report.

But Carlos Santos Ferreira, head of Millennium bcp, Portugal's biggest private bank, said in a television interview late Monday that it was "indispensable that the country seeks a short-term loan".

A spokesman from the bank would not comment on whether the bank had decided not to buy further government debt.

A short-term loan has been mooted by Portugal's opposition Social Democrats as a solution to growing financial uncertainty caused by the resignation of the government after parliament rejected its latest austerity measures.