When the world’s biggest bank finally goes bankrupt

The Wall Street bank that is being probed for allegedly colluding with drug traffickers in the Dominican Republic has finally collapsed.

The Financial Institutions Authority of the Dominican (FAAD) said Friday it was shutting down the Banca del Sur (BBS), one of the world´s largest and oldest banks.

In a statement, FAAD said the bank was insolvent due to the deterioration of the balance sheet, financial activities, and the nature of the investments and activities undertaken by the bank, the first of which was to establish a subsidiary company in the Caribbean in 2007.

It also said the failure was due to a lack of prudence, lack of governance and a lack the requisite liquidity.

The bank’s shares fell 3.3 percent in trading Friday.

In September, the agency said the BBS, one of five Banca de Santander (BS) subsidiaries, had defaulted on more than $200 billion of debts.BBS had been on the brink of collapse for months, as it faced growing pressure from regulators to reduce its exposure to the countrys drug trade.

It had already said in May that it was preparing for a Chapter 11 bankruptcy.

But on Thursday, it was forced to announce that it would go into voluntary liquidation.

In March, it agreed to pay nearly $100 million to resolve a lawsuit brought by the Dominican government, a decision that angered many Dominican investors.

Banks and other financial institutions in the region were also in the spotlight over alleged illegal drug trafficking.

Earlier this month, the FAAD released a scathing report into the BSP, accusing the bank of laundering $1 billion from Colombian cocaine, $200 million from Ecuador, $150 million from Russia and $60 million from Venezuela.

The report also alleged that BSP had paid illegal kickbacks to clients to influence governments and politicians in Colombia and Ecuador.