Editing Economy of Spain (section)

==Banking system==
{{Further|Savings bank (Spain)}}
Spanish private commercial banks played a central role in Spain's economic development, benefiting from their role as the state's creditor in the 19th century, from their ability to monetize public debt, and from state-sanctioned oligopolistic arrangements that lasted from the beginning of the 20th century until the late 1980s, when European rules forced a liberalization of the sector.  It has been argued that the favorable treatment received by the main Spanish commercial banks and their close relationship to the Bank of Spain (''Banco de España'') following the end of the Franco regime allowed for a public-private partnership to restructure the large commercial banks into two large banks (Santander and BBVA) with the purpose of preparing the private institutions for international competition and external expansion once the European banking market was integrated in 1992<ref>{{Cite book|last=Pérez|first=Sofía A.|url=https://open.bu.edu/handle/2144/6894|title=Banking on Privilege: The Politics of Spanish Financial Reform|date=1997|publisher=Cornell University Press|isbn=978-0-8014-3323-8|language=en-US}}</ref> Alongside this financial mercantilism benefiting the commercial banking sector, Spanish regulators also allowed for the vast expansion of not for profit savings banks sponsored by regional governments who became heavily exposed to the housing mortgage and real estate development sectors during the Spanish economic boom of 1999–2007.

Prior to 2010, the Spanish banking system had been credited as one of the most solid of all western banking systems in coping with the ongoing worldwide liquidity crisis, thanks to the country's conservative banking rules and practices. Banks were required to have high [[capital requirement|capital provisions]] and to demand various guarantees and securities from intending borrowers. This allowed the banks, particularly the geographically and industrially diversified large banks like [[BBVA]] and [[Banco Santander|Santander]], to weather the real estate deflation better than expected. Indeed, Spain's large commercial banks have been able to capitalize on their strong position to buy up distressed banking assets elsewhere in Europe and in the United States.<ref>Spain's largest bank, Banco Santander, took part in the UK government's bail-out of part of the UK banking sector. [[Charles Emrys Smith|Charles Smith]], article: 'Spain', in Wankel, C. (ed.) ''Encyclopedia of Business in Today's World'', California, USA, 2009.</ref>

Nevertheless, with the unprecedented crisis of the country's real estate sector, smaller local savings banks ("Cajas"), had been delaying the registering of bad loans, especially those backed by houses and land, to avoid declaring losses. In June 2009 the Spanish government set its banking bailout and reconstruction fund, the ''Fondo de reestructuración ordenada bancaria'' ([[FROB]]), known in English as Fund for Orderly Bank Restructuring. In the event, State intervention of local savings banks due to default risk was less than feared. On 22 May 2010, the ''Banco de España'' took over "CajaSur", as part of a national program to put the country's smaller banks on a firm financial basis.<ref>{{cite news| url=https://www.bloomberg.com/apps/news?pid=20601087&sid=a7EtmcVuIwwQ&pos=6 | work=Bloomberg | first=Charles | last=Penty | title=CajaSur, Catholic Church-Owned Lender, Seized by Spain Over Loan Defaults | date=22 May 2010}}</ref> In December 2011, the Spanish central bank, [[Bank of Spain|Banco de España]] (equivalent of the US Federal Reserve), forcibly took over "Caja Mediterraneo", also known as CAM, (a regional savings bank) to prevent its financial collapse.<ref name="Economist20080415">[[:es:Caja Mediterráneo#2011 Intervención y nacionalización]]</ref>{{Circular reference|date=January 2018}}
The international accounting firm, PricewaterhouseCoopers, estimated an imbalance between CAM's assets and debts of €3,500 million, not counting the industrial corporation. The troubled situation reached its peak with the partial nationalization of [[Bankia]] in May 2012. By then it was becoming clear that the mounting real estate losses of the savings banks were undermining confidence in the country's government bonds, thus aggravating a sovereign debt crisis.<ref name="MuñozMontijano-Bloomberg">{{cite news| url=https://www.bloomberg.com/news/articles/2017-03-15/spain-seeks-to-merge-state-owned-banks-bankia-and-mare-nostrum | work=Bloomberg | first=Macarena | last=Muñoz Montijano | title=Spain to Recoup Bailout Funds With Merger of Rescued Banks | date=15 March 2017}}</ref>

In early June 2012, Spain requested European funding of €41 billion<ref name="MuñozMontijano-Bloomberg"/> "to recapitalize Spanish banks that need it". It was not a sovereign bailout in that the funds were used only for the restructuring of the banking sector a full-fledged bailout for an economy the size of the Spanish would have reached ten or twelve times that amount).
In return for the credit line extended by the EMS, there were no tax or macroeconomic conditions.

As of 2017 the cost of restructuring Spain's bankrupt savings banks was estimated to be €60.7 billion, of which nearly €41.8 billion was put up by the state through the FROB and the rest by the banking sector.<ref name="ElPaísbailout">{{cite news| url=http://elpais.com/elpais/2017/01/11/inenglish/1484125815_626310.html | work=El País | first=Iñigo | last=de Barrón | title=Spanish bank bailout cost taxpayers €41.8, Audit Court finds | date=11 January 2017}}</ref> The total cost will not be fully understood until those lenders still controlled by the State (Bankia and BMN) are newly privatized.<ref name="ElPaísbailout"/> In this regard, by early 2017 the Spanish government was considering a merger of both banks before privatizing the combined bank to recoup an estimated 400 million euros of their bailout costs.<ref name="MuñozMontijano-Bloomberg"/> During the course of this transformation, most regional savings banks such as the [[Caja de Ahorros del Mediterráneo|CAM]], [[Catalunya Banc]], [[Banco de Valencia]], Novagalicia Banco, Unnim Banc or Cajasur<ref name="ElPaísbailout"/> have since been absorbed by the bigger, more international, Spanish banks, which imposed better management practices.

As of 2022, Spanish banks have halved their number of branches to about 20,000 in the decade since the [[2008–2014 Spanish financial crisis]] and the subsequent international bailout in 2012. The remaining banks have reduced retail opening hours and pushed [[online banking]]. A retired urologist with [[Parkinson's disease]] gathered more than 600,000 signatures in an online petition "I'm Old, Not an Idiot" asking banks and other institutions to serve all citizens, and not discriminate against the oldest and most vulnerable members.<ref name="nyt">{{Cite news |last=Minder |first=Raphael |date=2022-03-25 |title='I'm Old, Not an Idiot.' One Man's Protest Gets Attention of Spanish Banks |language=en-US |work=The New York Times |url=https://www.nytimes.com/2022/03/25/world/europe/spanish-banks-protest-carlos-san-juan-de-laorden.html |access-date=2022-03-29 |issn=0362-4331}}</ref>