Espirito Santo Turmoil Shows ECB Systemic Risk Challenge

The Espirito Santo saga is giving believers in the end of the euro-area crisis cause for pause.

Although a return to the panic days of the crisis may be unlikely, the case, involving the inability of a parent company of a bank in Portugal to make some short-term debt payments, has sent government bonds of Europe’s most-indebted nations and the stocks of lenders tumbling, showing how fragile investor confidence in the region’s banking recovery is.