Interbanca S.p.A. was an Italian merchant bank that specializes in lending and financing transactions for medium-sized firms. Its headquarters are in Milan and it has 10 branches in major cities throughout Italy.
79-676: Following a series of acquisitions in the Italian banking industry, Interbanca became a subsidiary of Banco Santander . In March 2008, the bank was purchased by GE Commercial Finance and renamed to GE Capital Interbanca . It was sold to Banca IFIS in November 2016, as part of a strategy by GE to reduce its financial services division. The bank is under Banca IFIS Impresa division of the group. A consortium of banks comprising Banco Ambrosiano , Banca d'America e d'Italia , and Banca Nazionale dell'Agricoltura , founded Interbanca – Banca per i Finanziamenti
158-632: A systemically important bank by the Financial Stability Board . Many subsidiaries, such as Abbey National , have been rebranded under the Santander name. The company is a component of the Euro Stoxx 50 stock market index . In June 2023, Santander was ranked as 49th in the Forbes Global 2000 list of the world's biggest public companies. Santander is Spain's largest bank. Banco Santander
237-477: A "prudential backstop," or minimum common loss guarantee for the reserve funds that banks set up to deal with losses from future non-performing loans. If a bank fails to meet this agreed minimum level, deductions are made directly from its capital. In addition to the core SREP process, the ECB is also in charge of assessing banks’ acquisition of qualifying holdings, in accordance with Regulation 1024/2013, Art. 4. Before
316-624: A 36% premium over the valuation for the acquisition. Although Banco Santander had sold Antonveneta, it retained Interbanca for the time being. In March 2008, Santander sold Interbanca to GE Commercial Finance, receiving in return GE Money businesses in Germany, Finland and Austria, and GE's Card and Auto Financing Businesses in the UK. In May 2015, GE appointed the Deutsche Bank to sell the Interbanca, then had
395-514: A 5.1 percent stake in Monitise plc for £33 million. On 7 June 2017, Banco Santander purchased Banco Popular Español for a symbolic price of €1. In 2018, the bank announced a three-year push into Latin America to increase its presence in the market, particularly Brazil and Mexico, targeting these countries' super-rich. On 13 and 14 July 2019, the integration of the entire Banco Popular network
474-596: A 50% stake in Santander Asset Management. In 2010, Banco Santander expanded into China , focusing on trade finance services and establishing a joint venture with China Construction Bank . The venture was set up in 2011 with initial funds of 3.5 billion yuan (US$ 530 million). Santander and La Liga had a title sponsorship deal from the 2016–17 season , forming the Spanish football league known commercially as La Liga Santander . Santander sponsored
553-647: A Medio Termine in 1961. By 1997 it had come under the control of Banca Antonveneta , which in 1999 acquired Banca Nazionale dell'Agricoltura. In June 1999, its parent listed Interbanca on the stock exchange, but then in February 2003 wholly acquired it. In 2006, ABN AMRO acquired Antonveneta, only to be itself acquired by a consortium consisting of The Royal Bank of Scotland Group , Fortis , and Santander. Banco Santander took control of Antonveneta in October 2007 and sold it on to Banca Monte dei Paschi di Siena in November at
632-423: A bank is recognized as significant or when deemed necessary (i.e., in case of exceptional circumstances or when a non-Eurozone country joins the mechanism). Comprehensive assessments require too much resources for them to be conducted annually. Other supervision tools are therefore used on a more regular basis in order to assess how banks would cope with potential economic shocks. As required by EU law and as part of
711-512: A close advisor of BNP Paribas . This group led by de Larosière delivered a report highlighting the major failure of European banking supervision pre-2008. Based on this report, the European institutions have set up in 2011 “The European System of Financial Supervision” (ESFS). Its primary objective was: " to ensure that the rules applicable to the financial sector are adequately implemented, to preserve financial stability and ensure confidence in
790-516: A data centre that was to support operations across North America, Central America and South America. The new centre was to be established within the 'Development Company for High Technology Cluster of Campinas' on 1 million square metres. Construction began in January 2011, and full operation was expected in 2013 offering over 8,000 direct and indirect jobs. In 2013, global growth equity firm General Atlantic , along with Warburg Pincus LLC, acquired
869-561: A loan servicing agreement for the remainder of its liquidated US auto loan portfolio. The transaction closed in the first quarter of 2010. In September 2010, Santander purchased Bank Zachodni WBK from Allied Irish Banks . On 28 February 2012, Santander announced that it had reached an agreement with KBC Bank to buy KBC's subsidiary Kredyt Bank in Poland. Santander merged Bank Zachodni WBK and Kredyt to create Poland's third-biggest bank, valued at about €5 billion (US$ 6.7 billion), having
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#1733094208699948-534: A market share of 9.6% in deposits, 8.0% in loans, 12.9% in branches (899), and more than 3.5 million retail customers. As a result of the merger, Santander came to hold 76.5% of the combined bank, and KBC came to hold about 16.4%; other shareholders held about 7.1% of the shares in the combined bank. Santander stated that it intended to buy more of KBC's shares in the combined bank to bring KBC's holdings below 10%; KBC affirmed it intended to sell its remaining stake. KBC sold its shareholding and Santander owns 75% of
1027-572: A net assets of over € 1,000,000,000. In 2016 Banca IFIS acquired Interbanca for €160 million, with an obligation to repay the inter-company debt, totalling €2.1 billion, to GE. Interbanca was merged with the parent company Banca IFIS on 23 October 2017. Banco Santander Banco Santander S.A. trading as Santander Group ( UK : / ˌ s æ n t ən ˈ d ɛər , - t æ n -/ SAN -tən- DAIR , -tan- , US : / ˌ s ɑː n t ɑː n ˈ d ɛər / SAHN -tahn- DAIR , Spanish: [ˈbaŋko santanˈdeɾ] ),
1106-433: A recapitalization plan for 2015. 0 0 0 0 0 ¹ These banks have a shortfall on a static balance sheet projection, but will have dynamic balance sheet projections taken into account in determining their final capital requirements. 0 0 0 0 0 0 Under the dynamic balance sheet assumption, these banks have no or practically no shortfall taking into account net capital already raised. 0 0 0 0 0 ² Taking into account
1185-444: A separate case, in which he was accused of insider trading . In 2007, the bank officially changed the official name back to Banco Santander S.A. In 1996, Banco Santander acquired Grupo Financiero InverMexico . In 2000, Banco Santander Central Hispano acquired Grupo Financiero Serfin of Mexico . On 26 July 2004, Banco Santander Central Hispano announced the acquisition of Abbey National plc. Following shareholders' approval at
1264-570: A share buyback of about 1.5 billion euros ($ 1.6 billion) and raised its payout ratio to 50%. On 21 October 2024, Spain's Santander launched its digital bank in the United States, with the potential to fund up to $ 30 billion in vehicle loans. The Santander Group operates across Europe, South America, North America and Asia, partly due to its acquisitions. As of 2013 it had more than 186,000 employees, 14,392 branches, 3.26 million shareholders and 102 million customers. Retail banking —
1343-505: Is a Spanish multinational financial services company based in Madrid and Santander in Spain . Additionally, Santander maintains a presence in most global financial centres as the 19th-largest banking institution in the world. Although known for its European banking operations, it has extended operations across North and South America , and more recently in continental Asia . It is considered
1422-510: Is chaired by Ana Patricia Botín-Sanz de Sautuola O'Shea , daughter and granddaughter of former chairmen Emilio Botin-Sanz de Sautuola y García de los Ríos and Emilio Botín-Sanz de Sautuola López , respectively. Santander has been designated as a Significant Institution since the entry into force of European Banking Supervision in late 2014, and as a consequence is directly supervised by the European Central Bank . Banco Santander
1501-531: Is divided in two: Finally, Basel III provides additional capital buffers covering more specific risks. European Banking Supervision has been actively involved in the making of Non-Performing Loans action plans. In the ECB guidance recommendations, the SSM, along with the European Banking Authority (EBA), have introduced a new definition of Non-Performing Loans (NPLs) that relates to the optimisation of
1580-497: Is organised by article 26 of the SSM regulation (Council regulation (EU) No 1024/2013). It is composed of all national participating supervisors, a chair, vice-chair and four ECB representatives. These members meet every three weeks in order to draft supervisory decisions then submitted to the Governing Council . The Supervisory Board is assisted in the preparation of its meetings by a Steering Committee. This committee gathers
1659-672: Is proportional to the risks they take. This is closely monitored by the supervisory authorities. Since 2016, if the results of the SREP for a bank do not reflect a proper coverage of the risks, the ECB may impose additional capital requirements to those required by the Basel agreement. This agreement provides a minimum capital requirement (called Pillar 1 requirement) of 8% of banks’ risk-weighted assets . Since Basel II , extra requirements (called Pillar 2 requirements) can be set in order to cover additional risks. This second category of requirements
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#17330942086991738-608: Is referred to as ECB Banking Supervision . EU member states outside of the euro area can also participate on a voluntary basis, as was the case of Bulgaria as of late 2023. European Banking Supervision was established by Regulation 1024/2013 of the Council, also known as the SSM Regulation , which also created its central (albeit not ultimate) decision-making body, the ECB Supervisory Board . Under European Banking Supervision,
1817-550: The EGM of Abbey (95 percent voted in favour, despite vocal opposition from most of those present) and Santander, the acquisition was formally approved by the courts and Abbey became part of the Santander Group on 12 November 2004. In June 2006, Banco Santander Central Hispano purchased almost 20% of Sovereign Bank and acquired the option to buy the bank (at the time, the market value was roughly US$ 40 per share) for one year beginning in
1896-461: The European Commission is in charge of checking the impacts such transactions will have on competition and, therefore, on consumers, the ECB is tasked to monitor the risks entailed by the suggested consolidations. If a transaction includes the acquisition of more than 10% of a bank’s shares or voting rights (i.e., a qualifying holding – Regulation 575/2013, Art. 4(1)36), it must be reported to
1975-468: The European Treaties , non-Eurozone countries do not have the right to vote in the ECB's Governing Council and, in return, are not bound by its decisions. As a result, non-Eurozone countries cannot become full members of the banking union (i.e., they cannot have the same rights and obligations as Eurozone members). However, non-Eurozone EU member states can enter into a "close cooperation agreement" with
2054-652: The UEFA Champions League for two years, from the 2018–19 season to 2020–21. Santander has also sponsored the main South American club competition Copa Libertadores since 2008 for the South American markets. In Formula One , from 2007 to 2017, Santander was a corporate sponsor of the Ferrari and McLaren teams. From 2022, Santander returned to Formula One as a premium sponsor of Ferrari. In March 2020, Santander Group in conjunction with La Liga announced
2133-473: The financial crisis of 2008 , an increasing number of banks were merging across Europe. This trend stopped as a result of the crisis: between 2008 and 2017, while we saw a decline in the number of cross-border M&As , domestic consolidations (i.e., between two national institutions) rose. In 2016, there were about 6 000 banks in the Eurozone , most of which with a clear focus on their domestic market. Today,
2212-570: The risks taken by European banks . This process, undertaken annually by supervisors from the ECB and Joint Supervisory Teams, is an essential element of the implementation of the Single Supervisory Mechanism . The aim of the SREP is to make sure that banks remain safe and reliable; that any factors that could affect their capital and liquidity are under control. Today, the capital and liquidity levels of banks are then directly subject to an ECB monitoring system while beforehand it
2291-731: The $ 40 per share it would have cost in 2006, Banco Santander ended up paying less than $ 3 per share. The acquisition of Sovereign gave Santander its first retail bank in the mainland United States. Santander renamed the bank to enhance its global brand recognition in October 2013. On 14 December 2008, it was revealed that the collapse of Bernard Madoff 's Ponzi scheme might mean the loss of €2.33 billion at Banco Santander. On 10 November 2009, HSBC Finance Corporation announced its auto finance entities had reached an agreement with Santander Consumer USA Inc.(SC USA) to sell HSBC US auto loan servicing operations, US$ 1 billion in auto loan receivables for US$ 904 million in cash, and enter into
2370-583: The 130 most significant credit institutions in the 19 Eurozone states representing assets worth €22 trillion (equal to 82% of total banking assets of the eurozone). The supervision report included: Based on these three criteria, the review found that a total of 105 out of the 130 assessed banks met all minimum capital requirements on 31 December 2013. A total of 25 banks were found to suffer from capital shortfalls on 31 December 2013, of which 12 managed to cover these capital shortfalls through raising extra capital in 2014. The remaining 13 banks were asked to submit
2449-506: The Asian market. In June 2014, Santander bought GE Money Bank, GE Capital's consumer finance business in Sweden, Norway and Denmark, for €700 million (US$ 950 million). In September 2014, it was announced that Santander was in talks to merge its asset management unit with that of Unicredit to create a European firm worth €350 billion in assets. In November 2014, Banco Santander acquired
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2528-633: The B&;B's shares were delisted from the London Stock Exchange . By the end of 2010 the two banks merged with Abbey National under the Santander UK brand. In October 2008, the Group announced to acquire 75.65% of Sovereign Bancorp it did not own for approximately US$ 1.9 billion (€1.4 billion). Because of the 2008 financial crisis at the time, Sovereign's share price had fallen greatly: rather than
2607-711: The Chair and the Vice-Chair of the Supervisory Board, an ECB representative (Edouard Fernandez-Bollo since 2019) as well as five deputies of national supervisors. A division of labour has been established between the ECB and national supervisors. Banks deemed significant will be supervised directly by the ECB. Even though the ECB has the authority to take over the direct supervision of any bank, smaller banks will usually continue to be monitored directly by their national authorities. A total of 115 banks are currently being supervised by
2686-439: The ECB directly supervises the larger banks that are designated as Significant Institutions. The other banks, known as Less Significant Institutions, are supervised by national banking supervisors ("national competent authorities") under supervisory oversight by the ECB. As of late 2022, the ECB directly supervised 113 Significant Institutions in the 21 countries within its geographical scope of authority, representing around 85% of
2765-399: The ECB is not new. In November 2016, the ECB wrote in its Financial Stability Review the following sentence with regards to the banking sector: “ Consolidation could bring some profitability benefits at the sector level by increasing cost and revenue synergies without worsening the so-called “too-big-to-fail” problem ” (ECB Financial Stability Review, Nov. 2016, p. 75) This positioning of
2844-422: The ECB's staff, national competent supervisors and experts in the banking field, make the link between the national and supranational levels. There is a JST for each significant banking institution. They act as supporting bodies, responsible mainly for the coordination, control and evaluation of supervisory missions. The Supervisory Review and Evaluation Process, also known as ‘SREP’, is a periodic assessment of
2923-405: The ECB. This procedure is organised by article 7 of the SSM regulation (Council regulation (EU) No 1024/2013) and the ECB decision 2014/510. In effect, these agreements imply the supervision of banks in these signatory countries by the ECB. A close cooperation agreement can be ended either by the ECB or by the participating non-Eurozone member state. Bulgaria , which is in the process of adopting
3002-565: The ECB; all other banks are supervised by their national supervisor. A bank is considered significant when it meets any of the following criteria: This significance status is subject to change due to, for example, mergers and acquisitions. In 2020, two additional banks (LP Group B.V. in the Netherlands and Agri Europe Cyprus in Slovenia ) have joined the list of banks supervised by the ECB. Joint Supervisory Teams (JST), composed of members of
3081-606: The EU level was the creation of the Lamfalussy Process in March 2001. It involved the creation of a number of committees in charge of overseeing regulations in the financial sector. The primary goal of these committees was to accelerate the integration of the EU securities market. This approach was not binding for the European banking sector and had therefore little influence on the supervision of European banks. This can be explained by
3160-445: The European banking landscape is composed of banks with a smaller market share at the EU level than what can be observed in the United States. As a result, the European market is said to be more fragmented and therefore less competitive than in the US or Asia. Cross-border mergers in banking would help banks to diversify their portfolio and, therefore, better recover from localized shocks in
3239-399: The European banking system arose long before the financial crisis of 2007-2008 . Shortly after the creation of the monetary union in 1999, a number of observers and policy-makers warned that the new monetary architecture would be incomplete, and therefore fragile, without at least some coordination of supervisory policies among euro members. The first supervisory measure put in place at
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3318-404: The SREP, the ECB carries out annual stress tests on supervised banks. In 2016, a stress test was performed on 51 banks, covering 70% of EU banking assets. These banks entered the process with an average Common Equity Tier 1 (CET1, i.e., percentage of Tier 1 capital held by banks) ratio of 13%, higher than the 11.2% of 2014. The test showed that, with one exception, all the assessed banks exceeded
3397-545: The UK, which it integrated with Santander Consumer Finance. In July 2008, the group announced it intended to purchase the UK bank Alliance & Leicester , which held £24 billion in deposits and had 254 branches. Santander also purchased the savings business of Bradford & Bingley in September 2008, which held deposits of £22 billion, 2.6 million customers, 197 branches and 140 agencies. The acquisition of Alliance & Leicester completed in October 2008 when
3476-420: The bank must further protect itself by increasing its equity reserve in the event the loan is not paid. The purpose of this procedure is to increase the bank's resilience to shocks by sharing the risk with the private sector. In other words, addressing the problems associated with PNPs in the future is paramount to consolidating the banking union, while developing lending activity. The new provisions put in place
3555-500: The bank, the rest is free float. In December 2012, Banco Santander announced that it would absorb Banesto and Banco BANIF , purchasing the remaining 10% of Banesto it did not already own. In October 2013, Santander acquired 51% of Spain's largest consumer finance business, Financiera El Corte Inglés , for around €140 million. Santander acquired a €470 million stake in HSBC 's Bank of Shanghai in 2013 to rebalance its business to
3634-507: The banking system's total assets (excluding financial infrastructures that are designated as LSIs such as Euroclear in Belgium, Banque Centrale de Compensation in France, or Clearstream in Germany and Luxembourg). European Banking Supervision represents the initial and so far most complete component of the broader banking union , a project initiated in 2012 to integrate banking sector policy in
3713-529: The benchmark used in 2014 in terms of CET1 capital level (5.5%). The results of this stress test show that, in 2016, EU banks had a better potential of resilience and shock absorption than in 2014. In 2018, two types of stress tests were performed: an EBA stress test for 33 banks and a SSM SREP stress test for 54 banks. The aggregate results of those tests show that, in 2018, both sets of banks had again strengthened their capital base compared to 2016, increasing their potential of resistance to financial shocks. Due to
3792-480: The capacity of the ECB to monitor 6,000 banks ". The Vice-President of the European Commission at the time, Olli Rehn , responded to that concern that the majority of European banks would still be monitored by national supervisory bodies, while the ECB " would assume ultimate responsibility for the supervision, in order to prevent banking crises from escalating ". The European Parliament voted in favour of
3871-532: The commission, the president of the Central Bank and of the Eurogroup on a preliminary report used as a basis for discussions at the summit. In compliance with the decisions made then, the European Commission published a proposal for a council regulation establishing European banking supervision in September 2012. The European Central Bank welcomed the proposal. Chancellor of Germany Angela Merkel questioned "
3950-528: The coronavirus pandemic, the 2020 stress test has been postponed to 2021. The results of this test should be published by the end of June 2021. All 20 eurozone member states automatically participate in European Banking Supervision. Croatia , being the latest country to join the Eurozone on 1 January 2023, was accordingly added to the scope of application of European Banking Supervision. Under
4029-704: The deal, Grupo Santander acquired ABN AMRO's subsidiary in Brazil, Banco Real , and its subsidiary in Italy, Banca Antonveneta . On 13 August 2007, Banco Santander Central Hispano changed its legal name to Banco Santander. In November that year, it sold Banca Antonveneta to Banca Monte dei Paschi di Siena , excluding a subsidiary Interbanca . In March 2008, Banco Santander sold Interbanca to GE Commercial Finance , receiving in return GE Money businesses in Germany , Finland and Austria , and GE's card and auto-financing businesses in
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#17330942086994108-538: The disposal of the NPLs by the banks. The main purpose is to integrate the multidimensional framework that the banks use in their evaluation process in the comprehensive assessment by the Supervisory Authority. A bank loan is non-performing when the 90-day period is exceeded without the borrower paying the due amount or the agreed interest. If customers do not follow the agreed upon repayment terms for 90 days or more,
4187-415: The economy. On the other hand, spreading risks across different geographies could also be a threat to the stability of financial markets: one might, indeed, worry of a potential effect of contagion between regions. Such transactions could also lead to the creation of groups regarded as “ Too big to fail ”, which, in case of systemic crises, would require significant support from the public purse. Following
4266-467: The euro area. The unfinished piece of the banking union agenda is about crisis management and resolution, for which the so-called Single Resolution Mechanism coexists with national arrangements for deposit insurance and other aspects of the bank crisis management framework. The policy agenda on the completion of the banking union, stalled since June 2022, also includes options for the regulatory treatment of sovereign exposures. The question of supervising
4345-421: The euro currency, signed a close cooperation agreement with the ECB in 2020. Croatia likewise had a close cooperation agreement with the ECB prior to joining the eurozone. The European Central Bank (ECB) has the leadership in European banking supervision. A strict administrative separation is foreseen between the ECB's monetary and supervisory tasks. However, final decision-making on both matters takes place in
4424-729: The fact that the European treaties did not allow the EU, at the time, to have real decision-making power on these matters. The idea of having to modify the treaties and of engaging in a vast debate on the Member States’ loss of sovereignty cooled down the ambitions of the Lamfalussy process. The financial and economic crisis of 2008 and its consequences in the European Union incentivized European leaders to adopt a supranational mechanism of banking supervision. The main objective of
4503-454: The financial system as a whole ”. The ESFS brought together, in an unconventional manner, the European and the national supervisory authorities. Despite the creation of this new mechanism, the European Commission considered that, having a single currency, the EU needed to go further in the integration of its banking supervision practices. The idea was that the mere collaboration of national and European supervisory authorities
4582-472: The first ever LaligaSantander Fest, a global charity concert event seeking to raise funds in response to the COVID-19 pandemic . European Banking Supervision European Banking Supervision , also known as the Single Supervisory Mechanism (SSM), is the policy framework for the prudential supervision of banks in the euro area . It is centered on the European Central Bank (ECB), whose supervisory arm
4661-465: The governance mechanism at stake (e.g. what the skills and experiences of the leadership are). With this communication, the ECB also took the initiative to clarify how it was computing the capital requirements of the new entity and how it would assess the quality of this new body's assets . According to two PwC analysts, the publication of this document by the ECB seems to indicate that it wishes to encourage banking consolidation. This position from
4740-641: The legislative proposal on the 12th of September 2013. The Council of the European Union gave its own approval on the 15th of October 2013. The SSM Regulation entered into force on the 4th of November 2014. The fact that European Banking Supervision is formulated as a regulation and not a directive is important. Indeed, a regulation is legally binding and Member States do not have the choice, unlike for directives, of how to transpose it under national law. The ECB published its first comprehensive assessment on 26 October 2014. This financial health check covered
4819-503: The main aspect of Santander's operations – generates 74% of the group's profit. The top markets by revenue in 2023 were: Brazil (21.6%), Spain (17.4%), the US (12.3%), the UK (11.2%), Mexico (10.2%), Poland (6.3%), Chile (3.9%) and Portugal (3.6%). On 10 June 2010, Grupo Santander announced that it would invest approximately US$ 270 million (€200 million) in Campinas , Brazil in a technology centre for research and data processing and
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#17330942086994898-505: The management structure or the need of holding more capital especially in times of financial crisis ). These actions shall normally be fulfilled by the following year. In case of non-compliance with these requirements, the ECB can charge a fine up to the double of the profits (or losses) which have been generated (or caused) by the breach and that can amount up to 10% of these banks’ annual turnover . The ECB can also request national authorities to open proceedings against these banks. In
4977-499: The merger former BCH executives accused Banco Santander chairman Emilio Botín Sanz de Sautuola y García de los Ríos who succeeded him, of trying to push his own agenda and threatened to take legal action. This post-merger disagreement was resolved when BCH executives Jose Amusátegui and Angel Corcóstegui agreed to accept severance payments, retire and pass control to Botín, at an expense to shareholders of € 183 million. The large termination payouts generated negative press, and Botín
5056-404: The middle of 2008. In May 2007, Banco Santander Central Hispano announced that in conjunction with The Royal Bank of Scotland and Fortis it would make an offer for ABN AMRO . BSCH's share of the offer added up to 28% and the offer would have to be made up of a capital increase through a new share issue. Then in October 2007, the consortium outbid Barclays and acquired ABN AMRO . As part of
5135-456: The national competent authority of the Member State in which the bank is established. This national authority must then conduct an assessment of the deal and forward its conclusions to the ECB, which is the final decision-maker, validating (with or without conditions) or refusing the transaction (Council Regulation No 1024/2013, Art. 15). In 2020, the ECB published a document aiming to clarify
5214-480: The new supervisory mechanism was to restore confidence in financial markets. The idea was also to avoid having to bail out banks with public money in case of future economic crises. To implement this new system of supervision, the President of the European Commission in 2008, José Manuel Barroso , asked a group of experts to look at how the EU could best regulate the European banking market. This group
5293-491: The orderly resolution plan of this institution, which benefits from a State guarantee, there is no need to proceed with additional capital raising. This is the only time where a comprehensive assessment has been done for the 130 banks supervised by the ECB. Since 2014, only a few numbers of banks have been comprehensively assessed by the ECB: 13 in 2015, 4 in 2016 and 7 in 2019. These comprehensive assessments are conducted either when
5372-526: The potential of reducing the exposure of individual firms to localized shocks, studies show that they also increase systemic risks on financial markets. In the attempt to mitigate those risks, the ECB is, since 2013, responsible (as part of the Single Monitoring Mechanism), with the European Commission , for assessing the soundness of banking mergers (Council Regulation No 1024/2013, Art. 4). While
5451-409: The previous year and after each cycle, there is an individual evaluation. Based on these assessments and simulations, supervisors write a report on the vulnerability of European banks, with a score ranging from 1 (low risk) to 4 (high risks), and list concrete measures for these banks to take. These measures can be quantitative - related to capital or liquidity, or qualitative (e.g., a change in
5530-636: The same body: the Governing Council. The Governing Council is the main decision-making entity of the ECB. It comprises the members of the Executive Board of the European Central Bank and the governors of all national central banks of the Eurozone 's member states. The Governing council is in charge, based on the opinion drafted by the Supervisory Board, of taking formal decisions with regards to its supervisory mandate. The Supervisory board
5609-468: The terrible consequences of the Lehman Brothers ’ fall in 2008, public authorities seem committed to avoid the collapse of other systemic banks. One of the side effects of these public guarantees is to encourage moral hazard : protected by a public net, these financial institutions are incentivized to adopt riskier behaviors. As this opposition of opinions illustrates, if cross-border mergers might have
5688-461: The way they were assessing such transactions, with the objective of being more transparent and predictable. Even though transactions are assessed on a case-to-case basis, the supervision process of these deals follow the same three stages: In phase two, the ECB pays particular attention to the sustainability of the suggested business model (e.g., under which assumptions it has been built, what has been planned in terms of IT integration, etc.) and to
5767-658: The worst case scenario, when a bank is likely to fail, the second pillar of the European Banking Union , the Single Resolution Mechanism , enters into play. Eventually, even though the methodology and the timeframe are identical for banks, the actions to take can significantly differ among them as well as the sanctions. As banks can take considerable risks , holding capital is essential to absorb potential losses, avoid bankruptcies and secure people’s deposits . The amount of capital banks should hold
5846-572: Was completed. This meant the definitive end of the Popular brand from a commercial point of view. In 2021, the bank was marked as one of the largest banks in Europe. Dodge & Cox became Santander's second shareholder in an operation carried out on 13 June 2022. The US fund has a 3.038% stake in the bank. At the time of purchase, given the value of 2.64 euros per share, this stake was valued at 1,364 million euros. In February 2024, Banco Santander launched
5925-512: Was eventually brought to trial on criminal charges of "misappropriation of funds" and "irresponsible management". However, in April 2005, the court cleared him of all charges, the €164 million retirement payments made to the two former executives having been found to be legal, "made as compensation for the services provided to the bank". Also that year, the anti-corruption division of the Spanish public prosecutor's office cleared Botín of all charges in
6004-423: Was founded in 1857 as Banco de Santander. In 1999, it merged with Banco Central Hispano , or BCH, which had in turn been formed through the 1991 merger of Banco Central and Banco Hispanoamericano. The combined bank, known as Banco Santander Central Hispano, or BSCH, was designed to be a "merger of equals", in which the top executives of the two pre-existing firms would share control of the merged entity. Soon after
6083-509: Was heterogeneously done at a national level. This evaluation is based on the monitoring of four different areas: In addition, each year, the European Central Bank is, under European Union law , obliged to perform at least one stress test on all supervised banks. This test will be part of the annual SREP cycle. Stress tests are computer-simulated techniques which evaluate the capacity of banks to cope with potential financial and economic shocks . Annual SREP cycles are based on data from
6162-612: Was led by Jacques de Larosière , a French senior officer who held, until 1978, the position of Director General of the Treasury ;in France. He was also President of the International Monetary Fund from 1978 to 1987, President of the “ Banque de France ” from 1987 to 1993 and President of the European Bank for Reconstruction and Development from 1993. On a more controversial stance, Jacques de Larosière has also been
6241-529: Was not enough and that the EU needed a single supervisory authority. The European Commission therefore suggested the creation of the Single Supervisory Mechanism. This proposal was debated at the Eurozone summit that took place in Brussels on 28 and 29 June 2012. Herman Van Rompuy , who was president of the European Council at the time, had worked upstream with the president of
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