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Troubled Portuguese bank insists it can cope with losses, helps soothe market nerves

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A currency trader passes by screens showing the Korea Composite Stock Price Index, left, and the exchange rate between the U.S. dollar and the South Korean won at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, Friday, July 11, 2014. Asian stock markets were muted Friday, following the lead of Wall Street traders spooked by worries about the soundness of a bank in Portugal that raised the specter of more financial turmoil in Europe. South Korea's benchmark Kospi dropped 0.70 percent at 1,988.74.( AP Photo/Ahn Young-joon). (The Associated Press)

Portugal's biggest bank has dismissed speculation that it is at risk from potential debt defaults by other companies in its financial and industrial group — an assurance that helped stabilize jittery European stock markets.

Banco Espirito Santo said late Thursday it has a 2.1 billion-euro ($2.8 billion) cash cushion which is enough to cover its exposure to other Espirito Santo group companies and keep it within regulatory requirements.

However, trading in the bank's shares on the Lisbon stock exchange remained suspended for a second day Friday after they fell more than 17 percent the previous day.

Concerns over the bank's liabilities spooked world markets, which broadly fell amid fears that Europe's financial crisis was not yet completely over and the Portuguese bank's problems might spread.