The Bank of Spain said yesterday it had stepped in to bail out a troubled savings bank, re-capitalising it, replacing its board of directors and preparing it for sale by competitive tender.
The central bank said in a statement it was injecting €2.8bn into CAM savings bank -- Caja de Ahorros de Mediterraneo -- and offering it an immediate line of credit of €3bn "to guarantee its liquidity".
CAM was one of five Spanish savings banks that failed stress tests a week ago. Three savings banks -- Caja de Extremadura, Cajastur and Cantabria -- pulled out of merger talks with CAM in March after details of its financial troubles emerged.
The Bank of Spain has already bailed out Caja Castilla-La Mancha and CajaSur.