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Withdrawals at Santander UK amid Spain fears
Sunday, 20 May 2012 08:55
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Customers with large deposits have started withdrawing cash from Santander, the bank has admitted, as it tried to reassure concerned members of the public that their money is safe.

The high street bank also saw an increase in enquiries by worried savers to its call centres and in its 1,380 branches across Britain yesterday. Customers are worried that the bank will be dragged into the eurozone crisis because it is owned by Spain’s Banco Santander.

On Thursday, Banco Santander, its UK subsidiary and 15 other Spanish banks had their credit ratings downgraded due to their exposure to the struggling Spanish economy. The Spanish banks were hit with more bad news yesterday, as official figures showed bad debts had risen to their highest level in 18 years.

However, shares across the sector shrugged off the concerns to rally strongly, as treasury minister Inigo Fernandez de Mesa said there was little reason for concern as “Spanish banks have plenty of liquidity”. Lenders have about two years of funding, due to the European Central Bank’s emergency support.

Spain is expected to announce shortly that the fund manager BlackRock and consultants Oliver Wyman will conduct an independent audit of the banks as part of month-long stress tests. Their remit will be to assess how much of the €600bn (£483bn) of mortgage debt needs to be written down.

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Source: The Unhived Mind