Decisions of the Single Resolution Board (SRB)

Banco Popular

On 6 June 2017 the European Central Bank (ECB) determined that Banco Popular, sixth biggest bank in Spain, was failing or likely to fail, since there were objective elements to support a determination that the entity will, in the near future, be unable to pay its debts or other liabilities as they fall due. On 7 June 2017 SRB determined that resolution action is in public interest. The SRB decided to exercise the power of write-down and conversion of capital instruments and after that used sale of business tool to transfer all shares of Banco Popular to Banco Santander for symbolic price of EUR 1.

SRB’s website.

GAJDOŠ, Tomáš – PÉNZEŠ, Peter: The resolution of Banco Popular Español S.A. Biatec, Vol. 25, 2017, No. 4/August, p.8-11.

Banca Populare di Vicenza a Veneto Banca

On 23 June, the European Central Bank (ECB) determined that Veneto Banca and Banca Popolare di Vicenza , which had both approximately 1 % market share in Italy,were failing or likely to fail as the two banks repeatedly breached supervisory capital requirements. On the same day SRB decided that resolution action is not in public interest. Therefore banks had to be wound down under normal insolvency proceedings. However under Italian law it was possible to transfer performing business of both banks to Intesa Sanpaolo for symbolic price of EUR 1. This transfer was accompanied by state aid measures taken by Italy and approved by European Commission to facilitate liquidation of both banks.

More information regarding this case can be found on website of SRB and Commission.

Summary of this case in Slovak can be found in journal Biatec:

PÉNZEŠ, Peter – ĎURIAČ, Daniel: Resolution in the Italian banking sector. Biatec, Vol. 25, 2017, No. 4/August, p. 2-8

ABLV

On 23 February 2018 ECB concluded that the ABLV, third biggest bank in Latvia and its subsidiary in Luxembourg, are failing or likely to fail on the basis that there were objective elements to support a determination that the banks will, in the near future, be unable to pay their debts or other liabilities as they fall due. Banks ended up in this situation due to liquidity problems, which were caused by U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) ’s announcement of a draft measure to name ABLV an institution of primary money laundering concern. On 23 February 2018 SRB decided that resolution action is not in the public interest for these banks. As a consequence, the winding up of the banks will take place under the law of Latvia and Luxembourg, respectively.

More information regarding this case can be found on SRB’s website.

Summary of this case in Slovak can be found in journal Biatec:

Ďuriač, Daniel: The ABLV Bank crisis. Biatec, Vol. 26, 2018, No. 05/October, p.10-14

PNB

At the request of Latvia’s Financial and Capital Market Commission in its capacity as the competent supervisory authority, the European Central Bank (ECB) decided in March 2019 to classify Latvia’s AS PNB banka as significant and to assume its direct supervision as of 4 April 2019. On 12 August 2019 the ECB concluded an on-site inspection, which found indications that the assets of the bank were less than its liabilities. As a result, on 15 August, the ECB issued its assessment that PNB was failing or likely to fail. Subsequently on the same day, the Single Resolution Board determined that resolution action was not necessary in the public interest. Less than one month later, on 12 September 2019, a Latvian court declared PNB insolvent.

More information regarding this case can be found on SRB’s website.

Summary of this case in Slovak can be found in journal Biatec:

Ďuriač, Daniel: Failure of Latvia’s AS PNB Banka. Biatec, Vol. 27, 2019, No. 06/December, p.24-28