ECB says Spain’s Banco Popular ‘likely to fail’

Spanish bank, Banco Popular, is “failing or likely to fail” following a significant deterioration of its liquidity situation and would therefore be sold to Banco Santander, the European Central Bank said on Wednesday.

“On June 6, the ECB determined that Banco Popular Espanol was failing or likely to fail,” the central bank, acting as the Europe’s banking supervisory authority, said in a short statement.

“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,” it explained.

“Consequently, the ECB determined that the bank was failing or likely to fail and duly informed the Single Resolution Board (SRB), which adopted a resolution scheme entailing the sale of Banco Popular Espanol to Banco Santander.”

esp/spm/ach