Your picture of cajas is not: message to The Daily Telegraph

LONDON | We know what The Daily Telegraph did last weekend. On Saturday 22, its daintly designed Business pages brought a report that fitted in two short columns some risk agency quotations and Spanish politicians’ chit-chat about ongoing disagreements as far as the future of the cajas is concerned. “Spain to merge cajas in attempt to calm fears” the headline read, and rightly so. Yet, apparently, this piece of news had had to be tamed on its way into the paper.

Indeed, the online version is far more suggestive—“Spain to rescue its banks”—and it comes illustrated with… a shrieking picture from November 2008 in which a small, irate group of investors staged a protest against Bankinter claiming they had been scammed, no less; Bankinter being, by the way, not a caja but a bank. To be sure, George Orwell would say that prefers to be loved than understood.

In spite that Reuters’ Felix Salmon has hinted at it today, I believe as does Alphaville that it would be hard to find one media outlet influential enough to move the markets. But it may be of some use to spell out that cajas are not public limited societies. Not, that is, unless Bank of Spain’s governor Francisco Fernández Ordóñez convinces the government that all savings banks must abandon their credit business to become foundations after transferring their entire assets into proper banks. There will be no more representatives from autonomous communities on their currently messy boards, but no more compulsory investments in culture and social enterprises, either.

Precisely, this is the bit rebel cajas are fighting over: their corporate responsibility funds that are so deeply embedded in their history—and I haven’t casually chosen the word “fight”: look at this press release in Catalan from Unnim (€30 billion in assets, one million clients).

“Following certain informations about the model for savings banks and allusions to possible new mergers in the sector, we wish to state that Unnim […] will focus exclusively in the execution of its integration plan, approved by the Bank of Spain, and the fulfillment of objectives and projects of the Strategic Plan 2010 to 2013, which aims at improving efficiency and finacially strengthening our institution in the new economic environment.”

To tell us this publicly, prior to today’s press conference, is quite something. Obviously, a few cajas consider that the threat Finance minister Elena Salgado has sent them at 6:00 p.m. is terribly unfair: savings banks have since this evening roughly seven months to push their core capital up to 8%; otherwise, the government’s Orderly Bank Restructuring Fund or FROB will inject them oxigen from the pockets of the taxpayer in exchange of stakes and voting rights. If cajas couldn’t find the necessary investment in the markets, of course.

The weakest savings banks have now heard the deadline—only I hope will not use a photograph of a bomb-timer.

About the Author

Victor Jimenez
London contributor at, reporting about the City and the Eurozone economies. He regularly writes for Spanish newspaper group Prensa Ibérica--some of his features include shared work with journalists of The Daily Telegraph and the BBC.

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