EU General Court dismisses application to annul the Banco Popular resolution scheme

Article summary

The Court of Justice of the EU, General Court has by five judgments delivered by the Third Chamber, Extended Composition, dismissed an action by the shareholders of Banco Popular to annul its resolution scheme. This was the first time the court had the opportunity to rule on the lawfulness of a decision concerning a resolution scheme adopted by the Single Resolution Board (SRB). The court held, amongst other things, that shareholders and creditors of the now-defunct Banco Popular had a right to be heard in a resolution procedure. However, the objective of ensuring the stability of the financial markets justified limiting that right. The court said hearings would have undermined that objective, as well as the requirements for speed and effectiveness.