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Spain will merge three deposit guarantee funds into a single 6.6 billion euro fund that will assume any losses from the state takeover of troubled savings banks, Economy Minister Elena Salgado said on Thursday.
"The financial sector will assume the costs of the clean-up and the recapitalisation of the Spanish financial sector, so that it does not affect the public deficit or fall on the taxpayer," Salgado said at a news conference.
She said the Socialist government would decree the new measure - combining deposit guarantee funds for banks, savings banks and credit cooperatives - on Friday at a weekly cabinet meeting.
Banks would not need to increase their contributions to the fund, Salgado said of the change, the latest step in consolidation of the banking sector, which has reduced the number of savings banks to 15 from 45 over the last two years.
Spanish bank shares were unmoved by the announcement, which one analyst said would not affect deposit security due to the funds' relatively small size compared to total deposits.
"It's tiny, a drop in the ocean," the banking analyst said.
Shares in Spain's two largest banks Santander and BBVA were up around 0.9 percent at 1350 GMT, slightly outperforming the blue chip index the IBEX , while mid-sized bank Popular was up 1.2%.
The restructuring of the banking sector has removed the distinction between the regionally focused "cajas" and commercial, retail banks such as Santander.
Spain's central bank, the Bank of Spain, has taken over or intervened in six savings banks that were at risk of collapsing or failed to raise capital under strict new requirements.
A state restructuring fund, known as the FROB, has put 7.6 billion euros into rescuing the savings banks, which were often run by local politicians.
Spain's regional savings banks were highly exposed to the construction sector, and many were left on a shaky footing after a property bubble burst in 2008.
The government's efforts to pursue consolidation and recapitalisation of the savings banks have helped take some of the heat off Spain in financial markets where investors are worried about the country's debt levels.