The entire board of Spain's Banco de Madrid has resigned after its Andorran owner was accused by the US of money laundering for clients from China, Russia and Venezuela.
The bank's seven-member board held a special meeting and unanimously asked the Spanish central bank to resign late yesterday to "defend the interests of employees and clients" and "eliminate any doubt about the stability" of the bank.
The central bank said today in a statement that it accepted the board's resignation and replaced them with a three-member board "to preserve the stability of the company and its operations".
Banco de Madrid is owned by Andorra-based Banca Privada d'Andorra, or BPA.
Andorra took over BPA and Spain took over its Spanish unit after the US Treasury Department this week designated BPA a foreign financial institution "of primary money-laundering concern", putting it at risk of being shut out of the US financial system.
The Treasury Department said BPA managers helped launder money, including 2 billion US dollars (£1.3 billion) allegedly siphoned from Venezuelan state oil company Petroleos de Venezuela SA.
One unnamed high-level BPA manager accepted "exorbitant commissions" to develop shell companies that helped launder the Petroleos de Venezuela money, the Treasury Department said.
Two other BPA managers helped alleged Russian and Chinese money launderers who were previously arrested in Spain, the department said. Money laundering was also said to have been performed for "numerous" Spanish business owners.