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Emilio Botín’s Santander lost one third of its value in three weeks |
News that the Bank of Spain felt compelled to step in at the end of May and take over CajaSur, after the large Spanish savings bank failed to agree a rescue merger with Unicaja, jangled the market’s nerves once more.
The central bank assured creditors and depositors they had no cause for concern: "CajaSur accounts for scarcely 0.6% of the assets of the Spanish banking system, whose soundness will not be in the slightest affected by this situation."
Cue panic.
Spanish risk assets had already suffered astonishing volatility in May.
Santander’s stock price, which stood at €9.50 in mid-April, lost one-third of its value in three weeks, falling to €6.70 on May 8. It shot up some 20% in a day to €8.10 on May 10 before slipping back to around €7.10...
