How To Guides
- Childbirth & Education
- Legal Formalities
- Pensions & Benefits
- Property & Accommodation
Did you know...?
CLICK HERE to find out more...
- Why every Expat is a scumbag
- Mixed Reaction to ECB Rate Cut
- Lorca Earthquakes 2 Year Anniversary
- Join us on the Costa del Sol to discuss your Spanish IHT requirements
- El Escorial
- Wincham announce opening of Marbella office
- Unauthorised Financial Advisers in Spain : UPDATE
- Community Insurance in Spain
- Caldendar Girls
- Own a Property in Spain ? Then you need to read the following
- EU Summit Eagerly Anticipated
- Travel Money Made Easy !
- Considerations when Insuring your Boat in Spain
- QROPS – HMRC Introduces changes that create havoc in the market place
- QROPS – All Change From April 2012
New law to seize control of Spanish banks
A new law expected to be approved either this week or next could see the Bank of Spain seizing control of Spanish banks even if they meet liquidity and solvency requirements a report said in El Pais today.
The "Enabling Law" forms part of a range of emergency powers which gives the government the ability to intervene if it is "foreseeable" a banking institution could fail to meet the rules in future.
The emergency powers will enable the Bank of Spain to impose strict demands on banks such as giving a bank just 10 days to restructure its finances and debts with creditors as well as being able to remove top officials from their posts within struggling entities.
However, any move by the Bank of Spain must be approved by the FROB, "Fondo de Reestructuración Ordenada Bancaria" aka Fund For Orderly Bank Restructuring, which some analysts are suggesting would delay or over complicate intervention and create yet more bureaucracy and red tape which Spain is especially famous for, more so as the FROB will be placed under the direct supervision of the Economy Ministry.
Spain recently gained approval for a €100 billion capital life line to fund it's ailing banks in the form of a European rescue fund. Whilst some emergency funds have been released, the bulk will begin to reach banks around September 2012.
The plan is that after the first round of central bank assistance the FROB would take charge of restructuring and orderly resolution of banks.
The FROB would be able to either directly inject cash, transfer debt securities from the Treasury or the European rescue fund according to El Pais.
In any event, it must be the Shareholders and creditors which first take losses before the state or any rescue funds. A move which is likely to be welcomed by the Spanish public who are feeling the pinch from harsh austerity measures imposed by the government.
Comment on this Story
Latest News & Stories
- Spain Cyber Crime Capital of Europe
- Corvera Will Not Cost Murcia One Euro
- Corvera Airport has "other parties interested"
- Spanish Court Convicts 22 Riot Police Officers
- Rajoy Pledges to Cut Taxes by 2015
- Second offer to buy Castellon Airport "Not Economically Viable"
- Spain to close 48 railway routes
- Regional debt falls in Q1
- Changes to Spain's Education System Approved
- Expats targeted by money launderers