The sight of Miguel Blesa, the former chairman of Caja Madrid, being driven to jail in a police van suggests Spain may be calling bankers to account after the nation needed European Union funds to bail out lenders.
To shore up the Spanish banking system, Caja Madrid Chairman Rodrigo Rato may offload a stake in a water ride inspired by the Greek god Triton, a restaurant modeled after a Roman villa and an Egyptian-themed fun house called the Piramide del Terror.
Bankia SA former Chairman Rodrigo Rato said the new head of Spain’s third-biggest lender overstated losses at the institution while requesting a “brutal” recapitalization by the state, El Mundo reported.
Prime Minister Mariano Rajoy’s battle to rebut corruption allegations is adding to the risk of holding Spanish government debt, said Andrew Bosomworth, managing director at Pacific Investment Management Co.
Spanish Prime Minister Mariano Rajoy said reports in El Pais newspaper that he or members of his party received illegal payments are wrong and stem from allegations made by unknown persons trying to damage his party.
Spain’s 41 billion-euro ($54 billion) rescue of lenders, prompted by record losses at Bankia, won’t spell the end of troubles for the nation’s financial industry as the economy remains mired in recession.