Open AccessTHE EFFECT OF BANK RESTRUCTURING ON THE ISSUANCE OF PREFERRED SHARES IN SPAIN
Author(s) -
Marta Tolentino,
Francisco Jareño,
Rocío Rubio
Publication year - 2018
Publication title -
revista galega de economía
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.159
H-Index - 6
eISSN - 2255-5951
pISSN - 1132-2799
DOI - 10.15304/rge.27.1.5231
Subject(s) - restructuring , financial system , context (archaeology) , balance sheet , business , real estate , recession , estate , economics , finance , macroeconomics , geography , archaeology
Since 2007, when the real estate bubble burst, we was immersed in a global economiccrisis. During this period, the Spanish financial system has experienced a process ofeconomic imbalance and downturn as a consequence of massive exposure to theconstruction sector. In this context, the banking institutions, aware of the need torecapitalize their balance sheets, offered their retail clients a complex and high-riskproduct: preferred shares. What at first was considered the ideal solution forrecapitalizing the institutions has done nothing but worsen the economic situation,highlighting the vulnerability of the banking Spanish system. All of this gave rise to aprocess of bank restructuring that was unprecedented in Spain. The result has been thereduction of the number of banking institutions from 45 in 2009 to 12 today, with theconsequent repercussions on the macroeconomic variables and the economies of familiesand businesses.