8 in 2010 Spanish finance enters a period of severe turbulence

Between the collapse of the housing bubble, falling consumption, rising unemployment and the outbreak of the unpaid including the rate could climb to 8.8 in 2010, Spanish finance enters a period of severe turbulence. Juan Ramon Quintas, President of the association of savings banks (ECSC), believes that the entire sector should show losses in 2010 and 2011. The international monetary fund figure to 20 the number of entities (controlling 20 of the market) called to even their solvency ratios fall below 8 and which should require as a result the injunction of more than 13 billion euros.

After a first warning with the rescue of the Fund of savings of Castilla La Mancha (CCM), the Government is finalizing the creation of a Fund of bank restructuring (FROB) which could be presented by the Council of Ministers on 26 June. "There is no systemic risk, but the decline in activity will lead to a process of concentration in the sector." "The coming year will be difficult," this week acknowledged Elena Salagado, the Minister of economy and finance. Miguel Blesa, the pattern of Caja Madrid, spoke of excess capacity of 30 to 35 of the banking network. The Spain has an agency per 1,000 inhabitants, which is much higher than the average European.

9 Billion euros, made to half by the Fund of guarantee of deposits banks and savings and the rest cases by the State budget, the FROB, which will have a capacity ten times superior with the guarantee of the State debt, is intended to accompany the restructuring of the sector. It will be headed by the Bank of Spain the powers of restructuring strengthened for the occasion (see below). Main concerned, the ECSC is supporting the project suggesting that the intervention of the Fund or the more "flexible" as possible. Ignoring the "fantasy of privatization", Miguel Blesa suggests to generalize the use of participatory certificates to enable the persons concerned to have access to the market to strengthen their own funds. José Luis Olivas, the President of Bancaja, the third Spanish savings bank, proposes to make changes in governance to "depoliticize" the management of establishments where the local political class has half of the seats.

Blind

The home is more cold with bankers. "If it dropped an entity, all over the world suffer", said the end of the Francisco Gonzalez, President of BBVA, more disert lips to denounce "the zombies", "non-viable entities" which activity is maintained artificially, that prevent "the consolidation of a strong banking system and drain resources that could be employed more effectively". "". "After the fall of Lehman, the banks that have made big mistakes were not expelled from the market for fear of a systemic risk", said Angel Ron, pattern of Banco Popular, for which "any contribution of capital shall be conditioned to a restructuring and a reduction in capacity."

The creation of the Fund to take the examination of the Parliament is not unanimous on trade unions, claiming a right of scrutiny. But, that they like it or not, the Spanish financial landscape that now has 150 banks, 45 savings banks and credit unions 82 is called to be transformed in depth.