cajas

The questions now are how much capital the cajas will need, and how much private interest they can excite.

Overall deposit growth is flat, so banks are trying to claw share from the beleaguered cajas by offering rates as high as 4%.

The Zapatero government has finally begun to force consolidation of the banking system , forcing troubled regional cajas to merge.

Mergers among the cajas may be good news for the banks: history shows merged banks lose market share in the short term.

But with listed Spanish banks already cheap, cajas would have to sell shares for a song to attract interest.

The Spanish government is rushing to shrink and fortify its network of savings banks known as cajas.

Spain's cajas account for almost half of its banking system and have been hit by the collapse in property prices.

The market shutdown reflects uncertainty over the extent of restructuring needed for the cajas.

Spain's 45 cajas have been fierce competitors to the banks, steadily taking market share over the years.

That leaves several cajas, and at least one bank, needing to boost capital.

Spain's unlisted savings banks, or cajas, are typically in a much worse condition than the big listed firms.

On September 30th the state took over three savings banks, or cajas, valuing their equity at close to zero.

The problems of the Spanish cajas show that a financial system with lots of small banks is not necessarily safer.

Earlier this year Spain's central bank took on the cajas, nationalizing some and forcing others to merge.

Any sign that the cajas can raise money without government support would also help.

Mr Zapatero says that these cajas could then be bought by a domestic or foreign bank, or by a large caja.

Now it has to rescue the savings banks, called cajas, and the municipalities.

Assuming this, the cajas could need 60 billion of new equity, on top of the 64 billion they already have.

SPAIN'S unlisted savings banks, or cajas, are facing their own revolution.

SPAIN'S savings banks, or cajas, have survived for nearly 200 years without the help of shareholders.

Savings banks (cajas) are undergoing a thorough restructuring: complex mergers to cut costs have shrunk their number from 45 to 17.

A bigger stumbling-block is that the plan does not address the cajas' bad-loan issue head-on.

One problem for the cajas is wholesale funding.

One small consolation, say the commercial banks, is that Spain's unlisted savings banks, or cajas, are generally doing even worse.

I wonder if some of this is to buy banks' or cajas' debt, in which case the impact gets diluted.

Spanish politicians agreed on May 5th to speed up mergers between wobbly cajas.

Its loan book is larger than the smallest 25 cajas combined, according to estimates by Credit Suisse.

But taken together, by January 4. 5% of all the cajas' loans had gone sour, compared with 3. 9% for the banking system.

The bill comes in for investors in bankrupt cajas