Investors who put their savings in preferential shares offered by Novagalicia, Bankia or CatalunyaCaixa will assume heavy losses for their decision. De Guindos made it very clear yesterday that these firms will receive funding to recapitalize, but they won't be able to compensate investors for losses related to this hybrid product.
The European Commission will make no comprimises despite Spain's protests that preferential shares be swapped for an equivalent amount of bank stock. Several days ago, Joaquín Almunia warned that the EU simply can't make exceptions for Spain when similar situaitons have occured in other nations and those investors took on losses.
Spanish governments could end up compensating small shareholders, but that's not an ideal option becuase the burden would then fall on all Spanish taxpayers.
