Spain's savings banks have decided to dip their toes in the
uncharted waters of the market by issuing shares, a move that could
eventually hasten the privatization of the 48 cajas de ahorros that
account for half the country's financial system.
Caixa Galicia, one of the top five savings banks, has taken the
first timid step by approving the issuance of up to Pta25 billion
($142 million) in non-voting shares that will be available to bank
customers and employees.
There is growing domestic and foreign pressure for the cajas to
open up to private capital.
The IMF and OECD have made recommendations in favour of
privatizing the sector and even the powerful Spanish business
confederation Círculo de Empresarios says it is wrong for "half of
Spain's financial system to be lacking ownership and under the
control of political parties".
The cajas have been ruthlessly exploiting their privileged mutual
status which...
