Like all other stock markets (mostly EU), weaknesses have been spotted in the financial sector of Spanish market as well, especially when the central bank of CajaSur got recently crippled by the overwhelming losses.

As a result, The Central Bank – Bank of Spain announced that they are taking over Bank CajaSur to step on the management and new business model programs. They injected a sum of $690 Million, through a separate reserve fund, that was maintained for crisis situation like these. This restructuring fund is established in the southern Spanish region of Andalusia.

Basically the whole dispute was over the collapse of merger negotiations between CajaSur and the Central Bank. Over the last year, CajaSur suffered a loss of 596 Million Euros and after getting hit by a series of mounting defaults on real estate loans, the situation got even worse.

The new authorities have mentioned that CajaSur will keep on functioning normally and they’d make sure that investors and lenders get their money back, as per the collateral policies of the bank. In addition, all those depositors and creditors are going to feel more comfortable with the new management and things will be better from now on.

The new fund was injected on last Saturday as form of an emergency aid program for CajaSur. But still there might be room for more aid, because the CajaSur situation is far from recovery as of this moment.

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