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Lionel Laurent

Banco Popular's Second Run at Credibility

Fundraising comes less than a month after reassurance about capital

Spanish lender Banco Popular's plan to sell about 2.5 billion euros ($2.8 billion) of new shares has dealt a brutal lesson to investors trusting past efforts by regulators and management to clean up European bank balance sheets. The stock fell to a 26-year low after the offering was announced on Thursday.

The fact is that Banco Popular was supposed to already be in the clear. It passed the European Central Bank's flagship 2014 study of over 100 banks' asset quality and resistance to economic shocks, and the Spanish Prime Minister said at the time the country's banks were in "stupendous" shape.