SPAIN-BANKS/INSOLVENCY Banco Madrid halts business after filing for bankruptcy

Record ID: 565909

  • Title: SPAIN-BANKS/INSOLVENCY Banco Madrid halts business after filing for bankruptcy
  • Date: 16th March 2015
  • Summary: EXTERIOR OF SPANISH CENTRAL BANK SIGN READING (Spanish): "SPANISH BANK" EXTERIOR OF SPANISH CENTRAL BANK EXTERIOR OF SPANISH CENTRAL BANK WITH SPANISH FLAG EXTERIOR OF SPANISH CENTRAL BANK
  • Embargoed: 31st March 2015 13:00
  • Keywords:
  • Location: Spain
  • Country: Spain
  • Topics: General
  • Reuters ID: LVAF5D17IS6593K5X4DIRUWS957Z
  • Story Text: Branches of the small Spanish bank, Banco Madrid, were closed to the public on Monday (March 16), after it filed for bankruptcy.
    The move came after the United States accused its Andorran parent of laundering money for organised crime groups.
    Customers of Banco Madrid, which caters for wealthy people, rushed to empty their accounts after parent group, Andorran lender Banca Privada d'Andorra (BPA), was described by the U.S. Department of the Treasury as an "easy vehicle" for criminal gangs in Russia and China to funnel their profits.
    The cash withdrawals prompted Banco Madrid to halt business and seek protection from its creditors, the Bank of Spain said on Monday.
    Police were placed next to the entrances of Banco Madrid branches in Madrid as workers lowered the blinds of the building.
    The bank's website was not available for transactions and showed a message reading "service temporarily unavailable".
    Banco Madrid had 15,000 clients with assets under management of about 6 billion euros ($6.3 billion) before the U.S. allegations and BPA's subsequent seizure by authorities in Andorra, a tiny principality in the Pyrenees mountains between Spain and France.
    The Bank of Spain will guarantee deposits of up to 100,000 euros per client. It said fewer than 500 clients had more than 100,000 euros deposited at the bank.
    U.S. officials said BPA's alleged money laundering occurred largely through its Andorran headquarters but Spain's anti-corruption prosecutor is looking into whether similar activity occurred at its unit there, a judicial source told Reuters.
    The chief executive of BPA, who was suspended along with the rest of the board last week, was arrested at the weekend on suspicion of money laundering.
  • Copyright Holder: REUTERS
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