The effects of the crisis on the Spanish banking system: Do Spanish cajas need a governance make-over

This article examines the effects of the crisis on Spanish savings banks (Cajas), financial entities with government participation which by law must use part of their profits for social purposes. With the crisis the Cajas have suffered more bad debt than the banks, leading to the biggest integration process in their history (37 Cajas out of a total of 46 are currently involved in integration). We describe the different strategies ¿merger, acquisition, or SIP- that Cajas have adopted to cope with the current financial crisis. Finally, the issue of whether change is required in the corporate governance of the Cajas is raised, and it is concluded that the most important factor for their mission and efficiency, in both financial and social terms, is the profile of their management, not the state influence on their corporate governance.