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20 January 2010

Commission requests Spain to limit aid given to savings banks


The Commission’s failure to approve the Spanish bank restructuring fund (FROB) has delayed the savings bank sector integration process. There are eight merger operations in progress. The two main mergers will be postponed until the Commission has ratified the FROB.

The Spanish government scheme was created to help crisis-hit banks avert any solvency problems. In a move that may spur consolidation among the country's savings banks, Spain set up the 9-billion-euro ($13 billion) bank restructuring fund (FROB) in June last year, allowing lenders to borrow up to 90 billion Euros. 11 billion Euros have already been given to the financial institutions.

FROB’s failure to approve the restructuring has delayed the savings bank sector integration process. There are eight (publicly acknowledged) merger operations in progress.. The two main mergers involving Catalan saving banks will be postponed until the Commission has ratified the FROB.




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