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RESEARCH PRODUCT

How viable are spanish credit cooperatives after recent bank capitalization and restructuring regulations?

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Over the past three years, major reforms have been approved in Spain in order to restructure the banking sector. The purpose of these reforms has been to reinforce the solvency of credit institutions through recapitalization and integration into larger organizations. The credit cooperatives have not presented any solvency problems which would justify these measures being applied to them. The problem that the financial authorities see in their case is their limited size. As a result, the credit cooperatives are immersed in an integration process which is not revolving around the Banco Cooperativo Español (BCE) or the Spanish Association of Rural Savings Banks, as might be expected, but is taking place through mergers between individual institutions and the setting up of various cooperative groups. While the credit cooperatives have not been channelled into bankization (conversion into banks) like the savings banks, ways to become banks have been opened up to them.