Spanish bank seeks protection following US money laundering probe

Banco de Madrid has stopped operations and is seeking protection from creditors after the US accused its parent, Banca Privada d’Andorra, of money laundering.

Customers of the Spanish bank withdrew a lot of funds, leading to a strong deterioration of its financial situation, according to an emailed statement yesterday from Banco of Spain, the central bank. Client deposits of up to €100,000 are guaranteed by Spain’s deposit-guarantee fund, the central bank said.

A US Treasury report on March 10 showing Andorra- based parent bank BPA, is a “primary money laundering concern” sparked withdrawals, said Banco de Madrid, triggering Spain’s first banking collapse since 2003.