I very much agree Mark.
France is a wealthier country and is a nation of savers but they have far fewer savings banks. Caja’s are just politicos personal tool in the manipulation of regional power.
I like this quote especially since my bank in Spain tried to pursude me to buy these shares. 😆 :
Bankia managed to force through an initial public offering in July as part of government demands for unlisted regional savings banks to take on private capital, although it had to price its shares at a 60 percent discount to book value.
More than half of the issue was sold to retail investors, following a wide-ranging newspaper and television campaign urging Spaniards to invest in the “best of the new banks”.
Institutional investors were overwhelmingly domestic, with many banks buying shares as it became apparent the listing had become a touchstone for faith in Spain’s banking system.
Despite the deep discount, the stock has lost about a third of its value since flotation.
“We were aware we risked losing over half of our investment, and that is exactly what is happening,” said one Spanish banking source who bought shares in the initial public offering and spoke on condition of anonymity.
“The IPO went ahead because of national interest and every Spanish bank that bought shares did so knowing that there were problems of viability and that the share did not have much room to climb.”
Such self-sacrifice may be laudable but it also points to a weakness. The deep ties between Spain’s savings banks and regional politics mean authorities have gone through three bank reforms in as many years and lost credibility within Europe rather than shut down weak performers.
“The public sector has some rotten banks, but cannot close them. Why not? Because local politicians would not tolerate it,” said Javier Diaz-Gimenez, economics professor at IESE Business School. “It would mean a loss of power for them.”