TALLINN The decision to orchestrate a rescue of Spain’s Banco Popular (POP.MC) this week was triggered by a run on the bank, European Central Bank Vice President Vitor Constancio said on Thursday.
“The reasons that triggered that decision were related to the liquidity problems. There was a bank run. It was not a matter of assessing the developments of solvency as such, but the liquidity issue,” Constancio told a press conference following the ECB’s regular policy meeting.
“Our role as ECB was just the declaration that the bank for liquidity reasons was failing or likely to fail,” he said.
The ECB, the euro zone’s top banking supervisor, stepped in to avert a collapse of Banco Popular, orchestrating a last-minute rescue on Wednesday by bigger local rival Santander (SAN.MC).
A final decision to sell Popular was made early on Wednesday by the Single Resolution Board (SRB), the agency set up by the EU to wind down stricken banks.
Constancio said that, legally, the ECB’s competence in the Popular rescue was limited to declaring that the bank was “failing or likely to fail for liquidity reasons”.
“The matter after the declaration went to the Resolution Mechanism, to their board, to take the decisions about resolution,” he said.
“So after the declaration of ‘failing or likely to fail’, we had no interference with the subsequent decisions. They belonged completely to the SRB.”
(Reporting by Adrian Croft and Francesco Canepa; Editing by Catherine Evans)