Banco Popular's resolution

was appropriate

, in accordance with European standards and the complaints demanding reparations will end in a dead end.

Almost five years after the disappearance of the Spanish entity, acquired by Banco Santander for 1 euro after an emergency resolution, the first in history according to the framework of the European Union, the Court of Justice of the European Union has ruled today , in a kind of 'jumbo sentence', settling the issue at once and answering dozens of questions in five resolutions.

In this five-year period, the Luxembourg court has received

more than a hundred appeals from natural and legal persons

who were holders of Banco Popular capital instruments before the resolution and who lost their investments.

The appeals sought the annulment of the resolution device and/or the Decision adopted by the European Commission at that time and financial compensation.

The CJEU has focused on five, "designated as 'representative pilot matters', and today, through separate rulings, it has dismissed them all, taking the opportunity to rule on the legality of a decision regarding a resolution device adopted by the SRB.

Until now, it had already published rulings on specific aspects, such as the right to compensation or return of the investment due to errors in the information when the holders acquired them.

But today he gets into the background covering all angles, from the legal ones that justify the procedure to the philosophical ones about the objective through the technical issues of the rights of those affected, during the resolution and later.

And it concludes that

neither the Single Resolution Board nor the European Commission made a manifest error of assessment

when considering that the conditions established to adopt a resolution measure were met, since not even solvency in the balance sheets means that there is sufficient liquidity to keep a financial institution operating.

And that the plaintiffs have not demonstrated the existence of alternative measures to resolution within a reasonable period of time,

The position of the CJEU has been consistent all these years, pointing out, in light of the directives and the supervision and resolution framework, that the disappearance of a bank in the circumstances that occurred with Popular pursued the general interest and that this prevails on shareholders' investment.

There have been thousands of protests before the Spanish courts, but the CJEU, although it considers that, although it cannot be ruled out that the shareholders and creditors of an entity that is the subject of a resolution measure may avail themselves of the right to be heard in the resolution, the exercise of this right may be subject to limitations.

And since that intervention at the highest level sought to guarantee the stability of the financial markets, it is justified that there be a limitation to that right to be heard.


would have jeopardized the objectives of protecting the stability of the financial markets

and the continuity of the entity's essential functions.

Secondly, the General Court, before which appeal is possible, reiterates in line with several judgments already pronounced that the decision to redeem and convert Banco Popular's capital instruments did not entail an "excessive and intolerable intervention that affects the very essence of the plaintiffs' right to property", but must be considered a justified and proportionate restriction of their right to property.

The third element of the sentences is more technical.

Part of the legal argumentation of the appeals focused on the two valuation reports that led to the resolution, one from the SRB and the other from an independent analyst.

The defenses complained about the lack of transparency, that there was no access, about their rigor.

But the General Court now considers that the Single Resolution Board and the Commission did not make public the documents on which they based their decision does not constitute a violation of this property right, since it is part of professional secrecy and confidentiality.

Therefore, the General Court considers that, following the adoption of the resolution mechanism, the applicants are not entitled to be informed of the entire file on which the SRB relied.

The Court considers that

although the process was not exempt from inaccuracies

, or from decisions that were perhaps not the best, it was understandable given the urgency, complexity and doubts.

"Thus, given the time constraints and the information available, certain uncertainties and approximations are inherent in any provisional valuation and the reservations made by an expert who has made this valuation do not mean that it was not 'reasonable, prudent and realistic' "Says the note from Luxembourg.

The solvency of the entity is not a requirement to consider that it has serious difficulties or is likely to have them, the magistrates estimate, and, therefore, it is not a condition for the adoption of a resolution device.

"In effect, the fact that an entity is solvent according to its balance sheet does not mean that it has sufficient liquidity, that is, funds available to pay its debts or other liabilities when due."

For this reason, says today's decision, the SRB and the Commission did not commit a manifest error of assessment when estimating that Banco Popular was in serious difficulties or was probably going to be, which is the expression contained in the regulation for these cases.

Likewise, the General Court notes that the resolution device was adopted "

At a technical level, closing the door to other types of claims, the magistrates consider that there was no irregularity in the sale process and that the SRB's decision to request the Spanish resolution authority to only contact the entities that had participated in the process of private sale of Banco Popular was legal.

And given that the plaintiffs have not demonstrated the existence of illegal behavior by the SRB or the Commission, for example in disclosing sensitive information, "no violation of the principle of confidentiality or the duty of professional secrecy has been detected".

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