How the mighty have fallen

23 July 2012 By Fiona Maharg-Bravo

As part of the country’s bailout, the euro zone wants Spain’s cajas to cede control of their banking arms. Even Caixabank – the great survivor – will eventually look more like its commercial rivals. The purge will be good for the financial sector, and for corporate Spain.

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Spain’s savings banks could be eventually required to sell their controlling shares in commercial lenders and list some of them, according to a memorandum of understanding on European aid for the Spanish banking system.
“The Spanish authorities will prepare by end-November 2012 legislation clarifying the role of savings banks in their capacity as shareholders of credit institutions with a view to eventually reducing their stakes to non-controlling levels”, the document said.
Spanish authorities must also introduce “incompatibility requirements regarding the governing bodies of the former savings banks and the commercial banks controlled by them.”

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