EU ‘triggered crisis at Spanish lender’

BRUSSELS bureaucrats triggered a run on a Spanish lender, investors have claimed.

Banco Popular collapsed in June and was sold to Santander for €1 after a loss of confidence which saw families rush to pull money out.

But hedge funds which owned bonds in the bank say the problem was worsened by the European Union’s Single Resolution Board, after Elke Konig, the head of the organisation responsible for winding up failing lenders, undermined Popular, saying the board was ‘watching’ the bank.

Days later, an anonymous official said an ‘early warning’ had been issued to Popular’s bosses.

Lawyers for hedge funds including Algebris Investments, Anchorage Capital and Ronit Capital say that amounted to ‘unlawful disclosures’ in breach of secrecy rules and are calling for a reversal of the decision to wind the bank up.

They say Popular’s stock price fell 50pc after Konig’s comments. The European Commission said it would be up to the European Court of Justice to decide on any case.