How To Guides
- Childbirth & Education
- Legal Formalities
- Pensions & Benefits
- Property & Accommodation
Did you know...?
...you can learn Spanish at a variety of locations across Spain, online or residential and day courses in Spain?
Regardless of your standard, and whatever level you wish to reach Don Quijote has a program to suit your needs!
- Airports and Airlines Spain
- Paramount Theme Park Murcia Spain
- Corvera International Airport Murcia Spain
- Daily Brief - Thursday 24 April 2014
- Things that have annoyed me this week
- Meet Wincham at The Homes, Gardens & Lifestyle Show, Calpe
- QROPS 2014
- Spain Increases IHT in Valencia & Murcia
- Removals to Spain v Exports from Spain
- The Charm of Seville
- Gibraltar Relations
- Pensioners 'misled' by Co-op Bank
- UK Inflation no problem for Governor Carney
- Retiro Park : Madrid
- Wincham announce opening of Marbella office
- Community Insurance in Spain
- Calendar Girls
- Considerations when Insuring your Boat in Spain
Spain takes over Bankia to steady ailing sector
Hoping to put an end to a four-year banking crisis, Spain's government effectively took over Bankia, one of the country's biggest banks, late on Wednesday after days of market anxiety over the lender's viability.
The PP government told Spaniards the banking sector was safe and said more measures to strengthen ailing lenders would come on Friday.
The sector has already been through three major overhauls since a building and property market crash in 2008, which left lenders with what is now about €184 billion in toxic assets including repossessed housing complexes that stand empty.
Holding 10% of deposits in Spain's banking system, Bankia is by far the largest of eight banks that the government has rescued over recent years.
"Bankia is a solvent entity that continues absolutely normal operations and its clients and depositors have no cause for concern," the central bank said in a statement.
The public seems to have accepted the government's assurances and so far there have been no signs of any deposit runs in Spanish banks.
Inside a Bankia branch in Madrid there was a normal flow of about eight clients on Thursday morning. "I'm not worried. I know my money is safe ... Maybe people with more money don't see it that way," said Fernando Hernando, 42, an interior designer, who was in the bank on regular business.
For years banking analysts and critics have pushed Spain to go further in recognising its banking troubles, which threaten to undermine the euro currency zone if the rescue is so expensive that it breaks Spain's public finances.
"Bankia has ended up in state hands because nobody accepted the reality of its financial situation in time," said an editorial in El Mundo newspaper, which is generally sympathetic to the ruling People's Party.Bankia's exposure to troubled real estate assets, including loans at risk of default and repossessed properties from bankrupt borrowers, is some €32 billion euros.
"Better late than never," said Expansion newspaper of the government's move, saying both the central bank and politicians had let the problem get out of hand.
With the economy in a second recession since 2009 and one in four workers jobless, banks face rising loan defaults beyond those connected with the burst construction bubble.
Spain will demand on Friday that banks set aside another €35 billion against loans to the ailing building sector - above and beyond the €54 billion they are already provisioning this year - raising the possibility more public cash will be needed to rescue the country's lenders.
The government is also expected to detail a scheme to remove toxic assets from banks' books and sell them off.
La Vanguardia newspaper said the European Commission had recommended to Spain a panel of independent experts to audit the banks.
Rajoy forced the banks to recognise huge losses in a decree passed on February and insisted at the time that no more public funds were needed for the sector.
But he had to make a U-turn as doubts persisted about Bankia, with the IMF pointing to its vulnerability in a recent report and auditors Deloitte declining to sign off the lender's 2011 accounts.
The government earlier this week forced out Bankia Chairman Rodrigo Rato, a former economy minister from the ruling party, and replaced him with Jose Ignacio Goirigolzarri, a prominent ex-banker from the Basque region.
Rato took Bankia, an amalgamation of seven smaller savings banks, public last year in an effort to increase the entity's capital and its transparency. Its stock price has dropped more than 40% since then.
European stocks have fallen in recent sessions as investors fret about Greece's political deadlock as well as the state of the Spanish bank sector. Bankia shares were down 1.5% Thursday's open at €2.083.
Latest News & Stories
- Corvera's SACYR to raise €416 mln in shares
- Argentina OKs settlement with Spain's Repsol over YPF
- Spain: Protests and the suffocating embrace of the law
- Spain's Caixa, Sabadell signal turnaround with bad debt falls
- Spanish yields hit new lows as economy accelerates
- Bankinter profit rise sets positive tone for Spain's banks
- Catalan leader to call independence vote despite Madrid resistance
- Spain "Violated Human Rights of Illegal Immigrants" : ECHR
- Spain to cut 2014 net debt issuance on higher tax revenue
- A fifth of British expats in Spain left last year
- How and where to complain about my Bank in Spain
- Bank guarantees - when things go wrong
- Applying for a Business Loan
- Bank Charges in Spain