The Spanish government will approve Friday an overhaul of savings-bank regulations, opening the door to private ownership of the mutually owned savings banks or "cajas," Prime Minister José Luis Rodríguez Zapatero said Thursday, The Wall Street Journal reported. "This is the most important reform ever of our banking system," Mr. Zapatero said at a meeting with journalists. With close ties to local communities and often controlled by local governments, Spain's cajas have borne the brunt of the collapse of Spain's decade-long housing boom.
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New Barcelona president Sandro Rosell has rubbished reports suggesting the Spanish giants face bankruptcy, though he did express concerns about the club's contract with financially stricken TV partner Mediapro, ESPN reported. Rosell's announcement on Barca's official website outlines plans to take out a €150 million loan to help pay staff and player wages, amid reports that Mediapro are in receivership and may not be able to honour a €1 billion TV rights deal that runs until 2013.
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Spain's central bank Tuesday said the country's savings banks have completed a "historic" consolidation effort, with the help of EUR11 billion in public funds, a key step forward in its plans to clean up a sector reeling from the collapse of a decade-long housing boom, Dow Jones reported.
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The European Commission Tuesday cleared Spanish aid for the restructuring of the local savings bank Caja Castilla-La Mancha, Dow Jones reported. "The commission is satisfied that Caja Castilla-La Mancha has been restructured in a way that limits distortions of competition and ensures the viability of the banking activities," said Joaquin Almunia, the commission's vice president in charge of competition.
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Spanish banking giant Santander today confirmed its bid for more than 300 branches that are being sold off by part-nationalised Royal Bank of Scotland in Britain, Finfacts reported. The owner of Abbey, Alliance & Leicester and Bradford & Bingley is the sole bidder for the 318 branches which NatWest owner RBS is disposing on the instructions of the European Commission. The business being sold has about three million customers - - - two-thirds of which are small businesses - - and consists of RBS branches in England and Wales as well as its NatWest uniits in Scotland.
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Spanish banks are borrowing record amounts from the European Central Bank as the country’s financial institutions struggle to gain funding from the international capital markets, the Financial Times reported. Spanish banks borrowed €85.6bn ($105.7bn) from the ECB last month. This was double the amount lent to them before the collapse of Lehman Brothers in September 2008 and 16.5 per cent of net eurozone loans offered by the central bank.
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Spanish officials acknowledged that the country's banks and companies are having difficulty finding credit, underscoring the pressure Madrid faces to pursue deep structural changes to win back investor confidence, The Wall Street Journal reported. Investors are particularly concerned that Spain would be unable to supply its banks with more capital, if needed, without emergency aid from the European Union and the International Monetary Fund. Spain has been scrambling in recent weeks to convince markets that it can repair both its ballooning deficit and its troubled banking sector.
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Spain has refuted claims that it is to seek aid from the European Union, The Irish Times reported. Spain's economy ministry said Friday that it has not made a request for economic aid from the European Union, after a report in the FT Deutschland that the EU was preparing an aid package in case Madrid asked for it. The newspaper said that the EU was preparing for an aid application in the months ahead for access to the fund set up to lend to euro zone countries that run into Greek-style payments problems.
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Marathon negotiations to overhaul Spain's rigid labor market collapsed on Thursday, raising the prospect of a tug-of-war between the government and trade unions in the troubled euro zone state, Reuters reported. The head of the World Bank meanwhile cast doubt on Europe's ability to surmount a sovereign debt crisis without restructuring liabilities of heavily indebted countries such as Greece -- a step euro zone leaders are refusing to contemplate.
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Spain's public-sector workers went on strike Tuesday in what could be a run-up to a full general strike in response to recent spending cuts the government has announced to reduce Spain's budget deficit, The Wall Street Journal reported. The strike is a challenge against austerity measures worth a total of €15 billion ($17.88 billion) this year and next, including a 5% cut in public-sector wages this year and a freeze in pensions next year.
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