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Anorak | Oooh! Yes please, let’s have local, politically connected banks!

Oooh! Yes please, let’s have local, politically connected banks!

by | 28th, February 2013

YOU’VE heard the calls. It’s mad to have only a handful of banks that are too big to fail. We should have local and regional banks And put localy politicians, union leaders, on their boards as well. To make sure that the needs of society are catered to, not just shareholders.

Well, yes, that’s as maybe, But then let’s go and have a look at the end results of that sort of system :

Nationalised Spanish lender Bankia is expected to reveal a €19bn loss next week, the largest in the country’s corporate history.

That’s a pretty big loss really. But obviously this is just another big bank that got into trouble and had to be nationalised, right?

No, not quite actually. Bankia is a merger of a number of small local banks in fact, those called “cajas”. Cajas were not for profit (usually, any profits were spent on local charities). And they

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Posted: 28th, February 2013 | In: Money Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink