The Caja de Ahorros del Mediterráneo (CAM) soap opera has ended with one of a series of ineffectual calculation errors made by the Bank of Spain, because they didn´t achieve anything save the same ending at a higher price tag.
Also, there were a string of political oddities that happened alongside failed attempts to find someone to buy the bank or merge it with some other lender.
Merging with Banco Base failed, and none of the potential buyers that weighed up the deal in April would dare commit to it without agreeing to an Esquema de Protección de Activos (a Spanish share protection plan) such that the purchase was viewed as safe from insolvency surprises, whether these were totally unexpected or through poor capital or risk estimations.
Still, the Bank of Spain is deciding on a safety mechanism that would allow them to face unexpected losses and encourage the deal to go through. Just what it was able to do once before, but now with a 2.8 billion euro stimulus from the Frob and an additional 3 billion euro line of credit. So the Bank of Spain intervening on behalf of the CAM puts a cherry on top of a long series of gaffs and irresponsible decisions that Ordóñez has committed while restructuring the Spanish cajas. Considering that he is responsible for government funds and taxpayers money, it seems negligent to delay taking action by not easing unwanted effects.
