SRB is moving into the final phase of the "right to be heard" process regarding its preliminary decision on whether to compensate the shareholders and creditors affected by the resolution actions concerning Banco Popular Español S.A. SRB and the independent valuer, where relevant, reviewed and are finalizing their assessment of the 2,856 submissions from registered and verified affected parties. On this basis, SRB will carefully consider its final decision about whether compensation needs to be granted to the affected shareholders and creditors. SRB will announce its decision in the coming months.
SRB transferred all shares of Banco Popular Español S.A. to Banco Santander S.A on June 07, 2017, following the exercise of the write-down and conversion of capital instruments prior to the transfer. Due to Banco Popular's stressed liquidity situation, ECB decided, on June 06, 2017, that Banco Popular was failing or likely to fail and notified SRB accordingly. SRB and FROB, the Spanish national resolution authority, decided that the sale was in the public interest as it protects all depositors of Banco Popular and ensures financial stability. The resolution scheme entered into force on the same day, following the EC endorsement.
On August 06, 2018, SRB published its preparatory act, in which it took a preliminary decision that it is not required to compensate affected shareholders and creditors of Banco Popular based on the conclusions of the report of the independent valuer regarding the valuation of difference in treatment. At that time, SRB also opened the registration for the right to be heard process. This allowed affected shareholders and creditors to provide reasoning where they do not agree with the preliminary decision and to explain why they consider alternative approaches or assumptions for the normal insolvency proceedings should have been adopted and, if they had been, how in their view these would have affected the final outcome. The submissions received by SRB covered both the way SRB approached the valuation for difference in treatment and the Valuation 3 report.
Keywords: Europe, EU, Spain, Banking, Right to be Heard, Resolution Framework, National Resolution Authority, FROB, Banco Popular, SRB
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