How easiest to do this is through a bank he added

The Spanish Government, which wants to end the savings and loan restructuring, to dispel doubts about the State of health of its financial sector, "prepare a plan to strengthen the solvency and credibility" of these entities, announced Friday the Government Vice-President, Alfredo Pérez Rubalcaba. Rumors ran for more than a week on a new public intervention in the restructuring of the "cajas" according to two assumptions: a second recapitalisation of caisses and the acceleration of their transformation into banks. The number two of the Government has however declined to give more details or even any timetable for the presentation of this plan. The Government is working in collaboration with the Bank of Spain and the Spanish Confederation of savings banks, was just to clarify.This announcement but it generated "confusion and outrage" at the "cajas" related "El Mundo" Saturday.

In a presentation to investors dated Tuesday last and available on its website, the bank restructuring fund (FROB) indicates that "further legal reforms could be carried out to strengthen the transparency and solvency of the sector". Created in June 2009 for the reorganization of the Spanish financial sector, the FROB came already helping eight mergers "cajas" for a total amount of EUR 11.5 billion.

But the savings of 45-17 in the first act of this restructuring in 2010, a pressing capital need. On the one hand, they focus more than half of the 439 billion of loans to real estate and construction sector, which continues to weaken since the bursting of the housing bubble in 2008. The depreciation of the assets of the "cajas" would be $ 26 billion EUR end December 2010, of which 10 billion would be attributable to Caja Madrid, according to the Spanish daily "El Mundo". On the other hand, funds will have to refinance more than 46 billion euros of debt coming due this year, according to calculations by the consulting firm Analistas Financieros Internacionales.

In his presentation to investors, the FROB is thus three possibilities to capture the capital. The preferred way remains the fundraising at market conditions. But "it is very difficult for savings capture capital markets due to distrust on their creditworthiness," said Joaquín Maudos, Professor at the University of Valencia. "How easiest to do this is through a bank", he added. Only the mergers as SIP (1) have effectively created a Bank, traditional mergers remaining savings banks. But SIP is not identified in the eyes of investors. Hence the desire of the Government of pushing the 'bancarization' of the "cajas".

Two emergency lanes

If private investors are not convinced, two emergency lanes are referred to by the FROB. The latter could provide a "temporary support" to the "cajas" in their quest for private capital. Caisses as well plan to organize a tour of presentation of their activity in China in March. According to the daily "el pais", investment companies and institutions of Great Britain, the United States, the Middle East and China also manifested themselves, but have offered "broken pix". As a last resort, the funds could come from the FROB itself - which has a capacity of debt of EUR 99 billion - as harvest of participation and non-loan as was the case hitherto. What prompted the Spanish media to speak of a "nationalization" partial and temporary in some cases.