The effect of bank restructuring on the issuance of preferred shares in Spain

• TOLENTINO, Marta ^[1] ; JAREÑO, Francisco ^[1] ; Rubio, Rocío ^[1]
  1. [1] Universidad de Castilla-La Mancha

     Universidad de Castilla-La Mancha

     Ciudad Real, España

     
• Localización: Revista galega de economía: Publicación Interdisciplinar da Facultade de Ciencias Económicas e Empresariais, ISSN-e 2255-5951, ISSN 1132-2799, Vol. 27, Nº. 1, 2018, págs. 123-144
• Idioma: inglés
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• Resumen

  • 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.