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EU approves Spain's 1-euro takeover of struggling bank

Editor: zhenglimin 丨Xinhua

06-08-2017 09:21 BJT

BRUSSELS, June 7 (Xinhua) -- The European Union (EU) regulators approved an urgent takeover of crumbling Spanish bank Banco Popular by the country's biggest lender Banco Santander on Wednesday.

The EU decision came shortly after Santander announced the deal within 24 hours following Banco Popular was branded as "failing or likely to fail" by the European Central Bank.

The EU decision came shortly after Santander announced the deal within 24 hours following Banco Popular was branded as "failing or likely to fail" by the European Central Bank.

The EU decision came shortly after Santander announced the deal within 24 hours following Banco Popular was branded as "failing or likely to fail" by the European Central Bank.

The takeover, worth a symbolic 1 euro (1.13 U.S. dollar), rescued Banco Popular from the brink of collapse, as its share price suffered a sharp fall over fears about liquidity situation.

Santander's move was adopted by the Single Resolution Board (SRB) earlier Wednesday and finally endorsed by the European Commission, the bloc's executive arm.

Following the EU decision, depositors of Banco Popular would have uninterrupted access to their full amount of deposits.

"The bank was failing, there were no private sector solutions outside of resolution and there were no supervisory actions that would have prevented its failure," the commission said in a statement.

"It was the best course of action to ensure the continuity of the important functions performed by the bank and to avoid significant adverse effects on financial stability," the statement noted, adding that the resolution scheme entered into force on Wednesday.

The takeover would cost Santander 7 billion euros to cover "the capital and provisions required to strengthen Popular's balance sheet," according to Santander. (1 euro = 1.13 U.S. dollars)

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