Spain intervenes to save Caja Castilla La Mancha

By Edward Harrison On Mar 29, 2009

This comes via Edward Hugh at “A Fistful of Euros“:

The governing council of the Bank of Spain has taken the decision to intervene in the operation of the Caja after carrying out an analysis of its financial position, thus taking as read that the negotiations which might have lead to its merger with the Andalucian ‘Unicaja’ have not been able to reach a successful conclusion.

The “intevention in Caja Castilla La Mancha will mean in the first place that the Bank of Spain will now manage the Caja directly via the management commission it is about to establish. Sources at the central bank have given an assurance that all the banks clients’ savings are guaranteed. The Bank of Spain will now negotiate with the government urgent measures to guarantee the liquidity of the Caja, and its normal functioning.

Add this to the three other European financial institutions having difficulty this weekend. We are likely to see much more of this from Spain’s savings banks as depression takes hold there.