Urgent Banco Popular rescue averts crisis
A run on the Spanish bank pushes the central bank into last-minute deal
Madrid/Brussels — European authorities stepped in to avert a collapse of Spain’s Banco Popular after a run on the bank, with a last-minute rescue on Wednesday by Santander, the country’s biggest lender. Owners of Popular bonds face losses of about €2bn, while Santander will ask its shareholders for about €7bn of capital to absorb Spain’s sixth biggest bank. Popular’s rescue was unveiled as the European Central Bank (ECB) announced the lender was set to be wound down, echoing a banking crash about five years ago that cost Spain €40bn. Santander’s takeover of the bank, which has been weighed down by risky property loans, for a nominal €1 marks the first use of a stricter EU regime to deal with failing banks adopted after the 2008 crisis.
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