The Public Fund for Orderly Bank Restructuring (FROB) Spanish decided Wednesday not rescue Banco Madrid, Spanish subsidiary Banca Privada d’Andorra (BPA) that was presented Monday the suspension of payments and is suspicious, according to US authorities bleaching.
A mercantile judge in Madrid had had a period of two weeks a public fund to decide whether it came to the rescue, before deciding on an application for suspension of payments deposited by the entity.
“The Governing Committee of the FROB (…) after deliberation thereon, has decided to immediately notify the Court not opening a resolution process to the Banco de Madrid entity” the government agency said in a statement.
The FROB has decided that it is unnecessary to rescue the company did not meet the legal requirements foreseen.
The agency has also taken this decision after a meeting of the executive committee of the Bank of Spain, who also considered that it was unnecessary to rescue the company.
Simultaneously, the Guarantee Fund of Credit Institutions informed customers with deposits in the entity ” unpaid due and payable cash deposits, Banco de Madrid, SAU having occurred is in a state of inability to restore them without having prospects to do so in the immediate future. “
Unable to Banco de Madrid to face their deposits, will be the Guarantee Fund which will have to “satisfy holders cash deposits amounts secured under the terms established by regulation.”
This fund will reimburse customers “to a maximum limit of 100,000 euros per holder of cash deposit” as a statement of the same.
The decision of the FROB gives way to the judge to authorize suspension of payments Banco de Madrid after last Monday administrators his forehead made by the Bank of Spain decided to request the suspension of payments.
This week, the European Commission had ruled that the bankruptcy of Banco Madrid, could create problems for the stability of the Spanish financial system, which in 2012 received a ransom for 41,300 million euros to save the banking sector.
The decision to stop payment was due “to the sharp deterioration in the financial position of Banco de Madrid, SA as a result of significant withdrawals of client funds that have occurred and recent developments known, which have affected its ability to address timely fulfillment of its obligations, “then informed the Bank of Spain.
The company, 100% subsidiary of the private bank Andorra BPA had been taken over by the Spanish authorities on Thursday after Andorra do the same with its parent.
Andorra BPA intervened after the United States qualify the bank “entity subject to ‘major concern’ on money laundering “.
Although initially, the intervention of both entities was not due to” an eventual financial weakness of BPA or her group, “withdrawals made in recent days led to the directors of Banco Madrid to ask the bankruptcy.
A March 10, when the Bank of Spain took control of Banco Madrid, this entity had about 15,000 customers in Spain, private and institutional, with at least 500,000 euros in their accounts and 21 branches in the country, said a spokeswoman, and managed around 6,000 billion euros of assets
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