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Under the proposed model of SIP, each caja will maintain its juridical and regional status as a small scale business. It will also preserve its governing body and its independent social projects, but will at the same time implement risk, treasury and credit policies as well as internal control and regulatory requirements.
GREATER PROVISIONS
The Bank of Spain further tightened the screws on the financial sector by demanding banks and cajas to widen their defaulting provisions. Banks and cajas will have less time to protect themselves against defaulting. The limit is now reduced to one year when it was formerly fixed between two and six years.
The supervising body also hardened its conditions for the acquisition of assets as payment for debts. From now on, banks and cajas will have to provide an equivalent of 30 percent of the value of the housing, real estate properties or developments which have figured in their balance sheets for more than two years.
The governor of the Bank of Spain, Miguel Angel Fernandez Ordonez, announced that he will not accept the hiding of mortgage debts in the balance sheets. This is a way of punishing the acquisition of property assets as payment of debts, which has been the most extended practice to counter defaulting.