The Spanish Banking System: From the Mirage to the Disaster

The harsh shock that the Spanish banking system has undergone recently can not be understood without a brief look at the historical background and the factors that have modelled it throughout the 20^th Century. The post civil-war context, the economic policies under Franco’s regime and then the liberalisation stage and the democratic transition allow us to better understand the state of the banking system at the dawn of the 2008 crisis. The changes in the regulatory framework have also played a major role in the development strategies of the Spanish financial entities. Finally, the growth phase at the beginning of the new century, artificially fuelled by a real estate bubble, explains the size of the disaster that led to it bursting. Still in a major restructuring process, new perspectives of the banking system remain unclear.