Source:
Financial TimesSpanish take steps to rescue savings banks
By Victor Mallet in Madrid
Published: May 9 2010 17:24 | Last updated: May 9 2010 17:24
Not since the global financial crisis began in 2008 has there been such a sense of urgency in Spain about the need to restructure the country’s struggling network of unlisted savings banks, according to Spanish bankers and financial analysts.
Even before the tightening of the European interbank market last week as a result of contagion from the Greek sovereign debt crisis, most of the smaller cajas de ahorros, unlisted savings banks usually influenced by regional politicians, were finding it impossible to raise wholesale finance except via the European Central Bank.
The cajas – between them, the 45 lenders account for about half of Spain’s financial system – have in aggregate been heading into losses as a result of the sluggish economy, bad loans connected to the property sector and a brutal war for retail deposits in which they cannot compete with listed giants such as Santander.
With large repayments due on the mortgage-backed bonds and other securities they sold to investors at the height of the property boom – debt maturities for banks and cajas amount to €85bn this year – the cajas are being forced to seek help from the state rescue fund known as the Frob and agree to mergers and cost cuts.
Read more:
http://www.ft.com/cms/s/0/02ba66ce-5b81-11df-85a3-00144feab49a.html?ftcamp=rss&nclick_check=1