When the global financial crisis erupted in 2008, the Bank of Spain was one of few regulators lauded for having had the forethought to enact measures aimed at protecting the banking industry. It had prevented Spanish banks and savings banks from handing out the junk loans that brought down several American lenders, and, uniquely, it created a €40-billion “anti-crisis” fund at a time when many shorter-sighted bankers, economists and analysts thought the credit boom, on the back of low interest rates and rising property prices, would continue indefinitely. Four years later, Spain’s economy is now being held hostage by its banking industry as fears about the ability of banks and, in … [Read more...] about Spain held hostage by its banks
Bank of Spain
Spain’s cajas bank on reform
Topping off a couple of months of frenetic activity intended to guarantee the future of the Spanish cajas de ahorros were three events at the end of July. Their chronological order is important: 1) July 21 - the approval by Congress of the LORCA, the new legislation governing the cajas which includes mechanisms allowing these savings banks to sell equity shares in themselves. 2) July 23 - the announcement on the part of Banca Cívica (the fruit of a partial merger of Caja Navarra, CajaCanarias and Caja de Burgos) that they would be availing themselves of this opportunity by signing a letter of intent with the very large and high profile American investment fund, JC Flowers & Co. The … [Read more...] about Spain’s cajas bank on reform