As the title states.
On Saturday May 22nd Spanish Authorites stepped in after merge talks failed to reach an agreement with CajaSur.The running of the Bank is now in the hands of the Bank of Spain.
This comes at a time when at least 16 other savings banks, many of which are run by local authorities or churches - are now in merger talks in an effort to provide financial stability.
The IMF has raised fresh concerns over the strength of the Spanish economy, calling for "far-reaching and comprehensive reforms" to ensure economic recovery.
"The challenges are severe: a dysfunctional labour market, the deflating property bubble, a large fiscal deficit, heavy private sector and external indebtedness, anaemic productivity growth, weak competitiveness and a banking sector with pockets of weakness," the IMF's latest report said.
Spanish banks have largely weathered the global financial crisis thanks to strict regulatory oversight, but the bursting of a decade-long housing bubble has left them with a more-than 300bn debt hangover.
The country's savings banks ? which hold half the assets of Spain's financial system ? are seeing profits eroded by soaring bad loans as real estate developers go the wall.
The Bank of Spain is now watch developments between the possible merger of Caja Guadalajara and CajasSol, reports indicate these could fail to reach an agreement by the deadline of June 30th.
May 26, 2010 · foxbat
> ?The challenges are severe: a dysfunctional labour market, the deflating property bubble, a large fiscal deficit, heavy private sector and external indebtedness, anaemic productivity growth, weak competitiveness and a banking sector with pockets of weakness,? the IMF?s latest report said.
Isn't that more or less what they were saying about the UK a year ago...banks and building societies falling over left right and centre...
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