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Policy Design, Analysis, and Evaluation

2021

Spain

Articles 1 - 3 of 3

Full-Text Articles in Economics

Spain – Fondo De Reestructuración Ordenada Bancaria (Frob) Capital Injections, Priya Sankar Nov 2021

Spain – Fondo De Reestructuración Ordenada Bancaria (Frob) Capital Injections, Priya Sankar

Journal of Financial Crises

The Spanish government created the Fondo de Reestructuración Ordenada Bancaria (FROB), known in English as the Fund for Orderly Bank Restructuring (FROB) in 2009 to perform temporary capital injections that facilitated the restructuring and mergers and acquisitions of struggling institutions. The FROB used preferred shares, ordinary shares, and contingent convertible bonds to recapitalize struggling Spanish credit institutions. The FROB injected a total of €54.4 billion of capital in three rounds. FROB I in 2010 injected capital to support the mergers of 25 insolvent regional savings banks, or cajas, into seven larger, more solvent banks through the subscription of convertible preferred …


Spain: Sociedad De Gestión De Activos Procedentes De La Reestructuración Bancaria (Sareb), David Tam, Sean Fulmer Jun 2021

Spain: Sociedad De Gestión De Activos Procedentes De La Reestructuración Bancaria (Sareb), David Tam, Sean Fulmer

Journal of Financial Crises

In the wake of the Global Financial Crisis, the Spanish real estate market struggled to recover, which posed significant issues for savings banks that had an outsized exposure to the real estate sector. The Spanish government created Sociedad de Gestión de Activos procedentes de la Reestructuración Bancaria (SAREB) in 2012 to buy impaired real estate assets from troubled banks and sell them over a 15-year period using funds from an up to €100 billion ($123 billion) loan from the European Financial Stability Facility. Its mandate was “to help clean up the Spanish financial sector and, in particular, the banks that …


Spain: Deposit Guarantee Fund Asset Management, Manuel León Hoyos Jun 2021

Spain: Deposit Guarantee Fund Asset Management, Manuel León Hoyos

Journal of Financial Crises

The global oil shock in 1973-74 occurred at a time when Spain was embarking on a liberalization of its financial system that resulted in many new entrants, particularly small- and medium-sized institutions. The banking crisis that followed from 1977-85 affected 52 of the country’s 110 banks, most of them of small- and medium-sized, that comprised over 20% of bank deposits. Spain established the Deposit Guarantee Fund in November 1977 to provide limited deposit insurance, and, in March 1978, established a Banking Corporation to take control of and reorganize troubled banks. However, because the Banking Corporation lacked the legal authority to …