Uncovering Spain’s Dirty Banking Secrets

23:08 El NACHO 0 Comments

Uncovering Spain’s Dirty Banking Secrets - Advisor Intelligence - - Forbes: "Only a few weeks ago Ireland said its banks were “Just fine thank you,” and that it didn’t need a bailout. Days later the Emerald Isle got a $90 billion bailout from the European Union and the IMF, of which $60 billion went directly into their banks.
Estimates of how much capital the so-called 'cajas' need to remain solvent ranges from 20 to 120 billion euros.
Now, Spain, after saying its banks were able to dance out of harm’s way is admitting it has to pour billions into mismanaged, secretive savings banks known as cajas, which literally means “boxes”.


Cajas, almost two thirds of which were forced to merge with help from the country’s bank-rescue fund last year, resemble regional development banks."But as Spain’s property-fueled expansion mushroomed over the past decade so did the reach of these “regional” lenders. By 2008 cajas branches had increased 50% to over 25,000. It’s estimated that cajas hold over 1.3 trillion euros in assets, over 40% of all bank assets in Spain, and have outstanding real estate loans exceeding 240 billion euros.

It’s a dangerous enough proposition when lenders grow their balance sheets exponentially, but what’s worse is that owners and managers of the cajas are usually local politicians, developers and other self-interested borrowers, labor and religious leaders.

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