The shares of Banco Popular got crushed.
After three years of relative calm and one month before yet another round of do-or-die general elections, the words “banking” and “crisis” are back on the front pages of Spain’s newspapers. Despite the untold billions of euros of public funds lavished on “cleaning up” their balance sheets and the roughly €240 billion of provisions booked against bad debt since December 2007, the banks are just as weak and disaster-prone as they were four years ago.
Francisco González, the President of Spain’s second biggest financial institution, BBVA, was the first to raise the alarm, warning a few days ago that the ECB’s negative interest rate policy “is killing” European banks.
Now, it seems González’s prophecy is already coming true.
Spain’s sixth largest financial institution, Banco Popular, on Wednesday evening announced that it was urgently seeking to raise €2.5 billion in capital in order to shore up…
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