The management of the bank crisis in Portugal: law and practice

The Portuguese banking system was until very recently ignored. As happened with the banking systems of other small economies, it was a common belief of both politicians and regulators that it was just too small to matter to the outside world. Today, after the financial crisis on 2008, we know better. If there is something to be learnt with the globalisation of economic and financial markets, it is precisely the relevance of the “butterfly effect”, by reminding us that even a tiny event can start a chain reaction and have large and wide-reaching effects. This paper aims at briefly describing some recent crisis episodes of the Portuguese banking system, the existing regulatory framework for the management of a bank crisis, as well as the lessons to be drawn from its application.