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As some of you will already know yesterday the spanish government decided to take over the administration of Caja Castilla la Mancha (CCM) a relatively small savings bank in the southern plateau of Spain.
This was a fairly predictable move as CCM had lent massively to developers such as Colonial which are now unable to pay their debts. It had also invested heavily in the failed plan of the “Ciudad Real Airport”
Although very few here are likely to be affected by this takeover (is not a bank which british expats will easily have any business with) it might be of some comfort to learn that customers deposits are backed up by the Fondo de Garantia de Depositos (FGD) up to 100.000 euros per person.
It must be noted that other products such as CCM´s bonds (deuda de la caja) will not be covered by the FGD.
This move is going to cost the spanish taxpayers about 9000 million euros.
In the best case scenario this will be a one off, in the worst case this may trigger a panic reaction that will compromise other banks.
Place your bets.
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@marios wrote:
9000 million euros
Are you sure,seems massive surely thats too high
source: http://www.elmundo.es/mundodinero/2009/03/30/economia/1238371355.html
Madrid.- El Gobierno aprobó el domingo, en Consejo de Ministros extraordinario, un Real Decreto por el que concede un aval del Tesoro para la financiación que otorgue el Banco de España, por un importe máximo de 9.000 millones de euros, a favor de Caja Castilla-La Mancha (CCM), para resolver sus problemas de liquidez. Aún así el rumor de insolvencia no se ha acallado.
Tras afirmar que el Gobierno no espera un “comportamiento irracional” de los clientes y que saquen cantidades excesivas de dinero, el jefe de la política económica del Ejecutivo ha justificado el aval de hasta 9.000 millones sobre los fondos depositados en Caja Castilla-La Mancha en que, en cualquier caso, había que prever este extremo. “Pueden pedir su dinero con toda tranquilidad, pero si no les hace falta utilizarlo no tienen ninguna necesidad de cambiar de entidad”, ha aseverado Solbes en declaraciones posteriores a TVE.
Yes, it is a massive amount of money, I guess, we take bank problems very seriously in Spain.
In any case is not that the goverment is fronting the money, it is an “aval” (guarantee) but if the amount is not required it will not be used.
So far, it is true, no panic reported in the CCM offices this morning.
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