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Banks will not save lenders if subject to penalties, warns CaixaBank's CEO

No other European bank will be interested in taking over a bank in financial difficulty if Banco Santander SA ends up having to compensate investors affected by the resolution of Banco Popular Español SA, according to the CEO of Spanish bank CaixaBank SA.

Popular was resolved by European authorities on June 7, 2017, and sold to Santander for €1; the sale has been subject to lawsuits.

El País quoted Gonzalo Gortázar as saying before a Spanish parliamentary commission investigating the financial crisis that no other bank would want to take over a problem lender in Spain or in Europe if it knew it might have to pay out legal compensation.

Gortázar said lenders with problems inherited from the financial crisis remained and may need to be rescued, and he called on lawmakers to create legislation that would protect lenders who take over a resolved bank.

Prior to its resolution by European authorities, which deemed Popular was "failing or likely to fail," the bank was suffering from a €37 billion debt pile accumulated after Spain's real estate boom-and-bust. Investors lost €3 billion in the resolution, the first test of new anti-crisis rules to protect taxpayers from bailing out troubled lenders.