Spain Moves to Tame Savings Banks
BY JONATHAN HOUSE AND LEIRE BARRERA
MADRID — As a deepening credit crunch threatens to prolong Spain’s already-lengthy recession, the government and central bank are coming under increasing pressure to clean up the country’s ailing savings banks.
The main problem: the unlisted savings banks known as “cajas” account for more than half of the EUR324 billion in loans to property developers, many of which are now on the verge of insolvency, according to Spain’s National Statistics Institute. Moreover, in the longer term there simply won’t be enough business to go around for all 44 existing cajas after the collapse of Spain’s once-booming housing market analysts and …