The Spanish government is planning to restructure the nation's ailing regional savings banks, known as 'cajas' by injecting more capital, the nation's deputy prime minister Alfredo Perez Rubalcaba said Friday.
"The government is preparing a plan to accelerate the restructuring of the financial system, primarily the cajas," Rubalcaba told journalists after the government's weekly cabinet meeting.
The debt-laden euro zone nation is struggling to avoid an international bailout similar to Greece and Ireland last year by resorting to a series of measures to reduce the budget deficit and prop up the nation's economy from a looming financial crisis. (See: Spain approves new austerity measures; says no need to tap EU fund)
The cajas rescue plan is being drawn up in conjunction with the Bank of Spain and the Spanish Confederation of Savings Banks (CECA), Rubalcaba said, although he did not provide any further details of the plan.
Addressing a separate ruling Socialist party meeting yesterday in Guadalajara, the minister said that the government would speed up reforms to save the nation's troubled savings banks.
Citing unidentified sources, the Spanish daily El Pais reported yesterday that the nation's central bank may force three of its weakest savings banks Nova Caixa Galicia, CatalunyaCaixa and Caja Duero-Caja Espana to become regular banks as a condition of getting support from Spain's bank rescue fund.