Banco Popular Español SA used €3.6 billion in emergency liquidity assistance from the Banco de España during the two days prior to the announcement of its takeover by Banco Santander SA as throngs of depositors withdrew their cash from the ailing bank, "two people involved in the situation" told the Financial Times.
Santander said June 7 that it was acquiring Banco Popular for a symbolic price of €1 after the ECB concluded that Banco Popular was "failing or likely to fail." Banco Popular had seen a steady number of depositors pulling their money out of the bank as it struggled to find itself a buyer or raise capital, the FT said in its June 8 report.
Deposit outflows increased in the past few days, the newspaper added. Banco Popular then told Spanish regulators June 6 that it would be unable to continue operating unless it secured a rescue deal.
"The reasons that triggered that decision were related to the liquidity problems," ECB Vice President Vítor Constâncio said June 8. "There was a bank run. It was not a matter of assessing the developments of solvency as such, but the liquidity issue."