Featured Product

    SRB Decides on No Compensation to Certain Banco Popular Stakeholders

    March 18, 2020

    SRB has decided that no compensation is due to shareholders and creditors affected by the resolution of Banco Popular Español, S.A. It concluded that they would not have been better off under normal insolvency proceedings. The decision is based on the post-resolution valuation by an independent valuer as well as on the analysis of comments received in the context of the "right to be heard" process. A summary of the SRB decision will also be published in the Official Journal of the European Union.

    Banco Popular was resolved on June 07, 2017, following the ECB assessment that it was failing or likely to fail. SRB decided that resolution was in the public interest to protect depositors and prevent instability in the financial system and the Spanish national resolution authority (FROB) implemented the decision at a national level. The bank was sold to Banco Santander, S.A.. The services provided by Banco Popular to its customers continued as normal after resolution. A main principle of the European resolution framework is that no creditor should receive worse treatment than if the resolved bank was wound up under normal insolvency proceedings on the resolution date. An independent valuer analyzed hypothetical insolvency scenarios in the Valuation 3 report. It found that they would not have been better off if the bank had gone into insolvency proceedings on the same date.

    On August 06, 2018, SRB published a preliminary decision that no compensation was required and opened a "right to be heard" process, allowing affected shareholders and creditors to express their views and provide reasoning on why they may not agree with the preliminary decision and its underlying reasoning. SRB reviewed 2,856 submissions from parties who registered and were verified to take part in the process. The independent valuer was also asked to provide its independent views on the comments related to the Valuation 3 report. As outlined in the decision, the comments included in these submissions covered a number of aspects, including the independence of the valuer and the content of the Valuation 3 report. Following this analysis, SRB adopted its final decision, which was addressed to FROB,  which is the national resolution authority that implemented the resolution decision. This final decision is the last step in the formal process following the resolution of Banco Popular. The SRB Chair, Elke König said, “I understand this will be disappointing for those who have lost out, however it proves that the resolution framework is effective and shielded the taxpayer from losses and financial instability.”

     

    Related Links

    Keywords: Europe, EU, Banking, Resolution Framework, Banco Popular, Right to be Heard, FROB, SRB Decision, BRRD, SRB

    Featured Experts
    Related Articles
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    EC to Defer Application of SFDR Standards Till July 2022

    The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.

    July 23, 2021 WebPage Regulatory News
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    News

    US Agencies Propose Changes to Call Reports and Instructions

    Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.

    July 22, 2021 WebPage Regulatory News
    News

    PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker

    The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Examines Asset Encumbrance in Banking Sector

    The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.

    July 21, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7291