What is the government aiming to achieve with the
new legislation on the cajas?
Spain's cajas have been around for nearly 170 years
but it wasn't until 1977 that they were allowed to compete on
an even footing with commercial banks. In the past 25 years
they have been steadily gaining market share, while at the
same time their presence in the market has prevented the
country's financial system from becoming a monopoly under the
two big banks, SCH and BBVA, that dominate the financial
services market.
The new law represents a major step forward in making the cajas
more market oriented and competitive. One of the most significant
initiatives is to limit the presence of public officials on the
boards of the cajas. The last law that was introduced on the cajas
in 1985 made it possible for political representatives to sit on
the boards, but in many cases they accounted for 50% or...
