Caja Sur calls in the administrators

On Friday the Bank of Spain sent in three administrators to CajaSur to take it over because there capital was inadequate to guarantee solvency.  Today I learn they are to pump in 0.5 billion € to keep it afloat.  I am a depositor so not overly happy but at least there is deposit protection of 100.000€ per account holder.  I have updated my guide to the Spanish economic crisis to take account of this and the austerity package announced by the government.

http://www.advoco.es/home/22-latest/50-spanish-economic-crisis-takes-a-new-twist.html

Interesting.  Is this the Spanish banking system going to collapse?  Apparently the cajas are sitting on €300 billion of bad-debt related to the property boom.  I wonder how much of the massive EU/IMF bailout money will be used to bail out the Spanish banking system?

Apparently Caja Sur was run/owned by the Catholic church.  You'd expect it to have been better run than it was.

 Apparently after a cash injection the branches are all going to be open today as normal.  Whether there will be queues of people round the block trying to withdraw all their money I don't know.  Could be interesting.

Many thanks for your post Bakeja.

Cajasur funded our Developer who still owns over 20 apartments at our Development. The Developer has stopped paying Community Fees for the past 6 months due to serious financial problems. Even previously Cajasur had been approving any significant payments has they will end up owning the unsold apartments when our Developer goes into Administration!!

At least the loan funding from Bank of Spain will help in the short term but they need to merge with another bank to have a realistic chance of survival

I know that your first €100K is protected should a bank fail in Spain, but how long would you have to wait to get your money back?  I would rather not have anything in the cajas, just to be on the safe side.  I'll stick with Barclays and Santander I think.

 I think you are supposed to be repaid within a month.  If you are uncertain about the deposit insurance, it is called FGD and there is a website called fgd.es that explains all.  More likely the government will just keep bailing out the cajas so noone has to call on the insurance.  Could be expensive according to telegraph because there are 445 billion € of property loans outstanding and many of them to the cajas.