The Bank of Spain recently decided to take over the Caja Castilla la Mancha, a regional savings bank. The move was the first bank bail-out in Spain since the global economic crisis arose last year, and is the first large intervention in Spain since 1993. The action comes after the bank failed to find a merger partner after months of looking with the help of the government.
The Spanish Minister for the Economy, Pedor Solbes, said that there were no other banks currently at risk, but the system is not immune to other failures. Depositors’ savings are safe and backed up by the Guarantee Fund, which covers up to €100,000 per account holder. After the takeover, the bank opened as normal and is operating on its regular schedule.
The bailout by the Bank of Spain has given investors some worries about the Spanish banks, and shares in major banks were down following the news.
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