The EU has said that it does not want Liderbank, Ibercaja and Caja3 to merge after Oliver Wyman published the banks' capital requirements. As a group, they possess 2.2 billion euros in debt. Instead of securing their future as firms, a merger would complicate things further.
The European Commission supports cleaning up the banks so that the weakest are absorbed or abolished as soon as possible. And that plan seems logical, because the terms outlined in the Memorandum of Understanding after the bank sector bailout was approved will ensure that this process concludes before the end of the year, minimizing costs where possible. The EC's proposal represents a good exit strategy for Ibercaja, the tidiest of the three banks. By divesting in some shares it could dodge needing public aid. The options for the other two banks are trickier, Caja3 in particular. It needs around 700 million euros. For these reasons, it makes sense to put an end to a process that in addition to making a bailout more critical is destined to end in failure.
Now is the moment when everyone needs to play with the cards they've been dealt and to push an overhaul of the financial sector in order to ready it to provide loans to companies, small businesses and families.
