| Author (Corporate) | European Commission: DG Communication |
|---|---|
| Series Title | Press Release |
| Series Details | IP/17/1556 (07.06.17) |
| Publication Date | 07/06/2017 |
| Content Type | News |
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Background On 6 June 2017, the European Central Bank (ECB) determined that Banco Popular Español S.A. was failing or likely to fail in accordance with Article 18(1) of the Single Resolution Mechanism Regulation. The significant deterioration of the liquidity situation of the bank in recent days led to a determination that the entity would have, in the near future, been unable to pay its debts or other liabilities as they fell due. Consequently, the ECB determined that the bank was failing or likely to fail and duly informed the Single Resolution Board (SRB), which adopted on the 7 June 2017 a resolution scheme entailing the sale of Banco Popular Español S.A. to Banco Santander S.A. The Single Resolution Board The SRB is the resolution authority within the Banking Union. Together with the National Resolution Authorities (NRAs) it forms the SRM. The SRB works closely with, in particular, the NRAs of participating Member States, the European Commission (EC), the European Parliament (EP), the European Central Bank (ECB) and National Competent Authorities (NCAs). The NRAs play a key role within the Banking Union. The mission of the SRB is to ensure an orderly resolution of failing banks with minimum impact on the real economy and the public finances of the participating Member States of the Banking Union.On 7 June 2017 the European Commission approved, under EU bank recovery and resolution rules, the resolution scheme of Banco Popular Español, S.A. based on a proposed resolution scheme by the Single Resolution Board (SRB). The resolution of Banco Popular Español, S.A. was approved under EU's bank recovery and resolution rules, as agreed in the post-crisis Banking Union framework. It involved the sale of Banco Popular Español, S.A. (BPE) to Banco Santander, a sound financial institution. The customers of Banco Popular would continue to be served with no disruption to the economy. Elke König, Chair of the SRB said: 'The decision taken today safeguards the depositors and critical functions of Banco Popular. This shows that the tools given to resolution authorities after the crisis are effective to protect taxpayers’ money from bailing out banks'. Trading in Popular shares were suspended and shareholders would lose 100% of their investment. Depositors would be fully protected. Santander would purchase Banco Popular for €1. Banco Popular was Spain's seventh-biggest bank. It had been struggling under the weight of the 'toxic assets' accumulated since the 2008 financial crisis, comprising properties seized from owners unable to pay back their loans and mortgages. |
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| Source Link | Link to Main Source http://europa.eu/rapid/press-release_IP-17-1556_en.htm |
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| Subject Categories | Business and Industry |
| Countries / Regions | Europe |
