The collapse of Bankia, which ended with a bill for the public coffers of 22,424 million, has many edges. And these, in turn, were determined by various characters. Among them, Rodrigo Rato stands out, president of the bank in the years of excesses and the collapse of the old box. And Luis de Guindos, then Minister of the Economy, who was the one who pressed the button to remove the former Vice President of the Government from the bank.
The one who was vice president of the Government of José María Aznar and architect of what the PP called the Spanish economic miracle played a leading role in the Bankia disaster. Rodrigo Rato arrived at Caja Madrid on January 28, 2010 after a process full of tensions within the Popular Party to replace Miguel Blesa, until then president of the entity. Esperanza Aguirre, at the head of the Community of Madrid at that time, wanted to put her number twoIgnatius Gonzalez. But Rato won the stake thanks to the support of Mariano Rajoy.
During Rato’s presidency, Caja Madrid and Bancaja merged (June 11, 2010). Both entities, together with the savings banks of the Canary Islands, Rioja, Ávila, Segovia and Laietana, constituted in December the company derived from the Institutional Protection System (SIP), Banco Financiero y de Ahorros (BFA). This union was the origin of Bankia: in March 2011 it was launched on the market with that new commercial name. It resorted to public capital through the Fund for Orderly Bank Restructuring (FROB) for 4,465 million. And began the procedures to go public. Rato managed to ring the bell on July 20, 2011 and less than a year later the hole in the bank accounts was uncovered.
In 2012, the deadline for the delivery of the audited financial results of the previous year expired. Bankia did not send them because the auditor did not receive the relevant information that he claimed from the managers of BFA-Bankia for months. The results presented without the audit report reflected profits of 309 million euros. This unsustainable situation culminated a decade ago, on May 7, with Rato’s resignation. On May 9, the State nationalized the group —it had to be rescued with 22,424 million public money— and José Ignacio Goirigolzarri took over the presidency. Shortly after arriving, he redid the accounts and presented losses of 2,979 million in the 2011 financial year.
He knows in depth all the sides of the coin.
Luis de Guindos
Luis de Guindos, Minister of Economy between December 2011 and March 2018, carried out various reforms so that banks increased their provisions and protected themselves from high exposure to brick. First, in January 2012, he presented a decree for banks to reinforce their provisions for toxic real estate assets, which was not enough, and drafted another decree in May to raise provisions even more: up to 82,000 million for the entire sector, which which put many banks in trouble.
The entities considered that the demands were very high. In the case of Bankia, according to Rato himself, these regulatory changes suffocated the bank. In fact, the second reform took place in the same week that the nationalization of Bankia was announced.
In this intense May, Guindos convened two meetings (on the 4th and 6th) with the country’s great bankers. The then Minister of Economy brought together Emilio Botín (Banco Santander), Isidro Fainé (La Caixa) and Francisco González (BBVA) together with Rodrigo Rato (Bankia) at the same table. For the first time, a banking crisis was addressed without the presence of the governor, who was not in Madrid, and in a debate with the competitors of the affected entity. There, the Bankia situation and Rato’s proposal were discussed: he intended to increase capital by 7,000 million euros. There was no agreement and doubts about the official figures exposed by the old box flew over. The irrefutable proof that the situation could not be redirected is that only one day later, on May 7, Rodrigo Rato resigned as president of Bankia and Guindos proposed Goirigolzarri to succeed him in office.
Jose Ignacio Goirigolzarri
José Ignacio Goirigolzarri took over the reins of Bankia in May 2012, in the depths of the Great Recession. After his arrival, he reformulated the accounts and losses of 2,979 million emerged. The executive proposed converting the FROB aid into BFA capital, which became 100% public. Thus, the State was left with 45% of Bankia.
A month after the arrival of Goirigolzarri, the Government of Mariano Rajoy requested a rescue from the European authorities for 100,000 million, which disrupted the restructuring plans proposed by the group to comply with the claims of the Bank of Spain. In this context, Goirigolzarri was forced to change course and develop a new restructuring plan packed with requirements and limitations imposed by Brussels.
Despite the scandals of the preferred shares and the IPO, the Bankia name was kept “for a matter of honesty”, says Goirigolzarri, who adds: “We made profound changes until we managed to make it an entity recognized by customers and the market”. During his management, the entity regained solvency and returned to profit. “The Bankia project has been possibly the greatest challenge I have faced in my career, and, perhaps for this reason, I feel especially proud of what has been achieved”, says the now president of CaixaBank. A new drift that led to the negotiation for the absorption of Bankia by said Catalan entity, which culminated in the merger of both groups at the end of March 2021.
Miguel Angel Fernandez Ordonez
Miguel Ángel Fernández Ordóñez was Governor of the Bank of Spain between July 2006 and June 2012. During his tenure, he went from the end of the years of economic boom to the darkest years of the Great Recession. During that period, he questioned the bank’s supervisory role over Bankia. In fact, Mafo, as the governor was known, testified in the trial for the entity’s IPO and was charged in the final stretch of the investigation. In the courtroom, he assured that he did not receive the emails from the inspector in charge of Bankia, José Antonio Casaus, in which he warned of the infeasibility of the entity. And he added that the opinions of this inspector were wrong.
In the trial, Fernández Ordóñez insisted that his management of the banking crisis at the head of the supervisor was correct and blamed the economic context for the fall of Bankia. The Association of Inspectors of the Bank of Spain, for its part, had said that it “looked the other way” in the face of signs of crime. And several of the defendants, including Rato, blamed the Bank of Spain for what happened. Mafo argued that the decision to go public was made by Bankia’s managers, in the same way that it was these managers who decided to merge seven savings banks to create the banking giant.
In his statement he also related that upon his arrival at the Bank of Spain in 2006 he found the credit and brick bubble already swollen under the mandate of his predecessor, Jaime Caruana, now a BBVA director. Mafo recalled that it was he who warned the then economic vice president, Pedro Solbes, and the PP’s financial manager, Cristóbal Montoro (later Finance Minister), that problems were coming and the need to create a fund to recapitalize the entities. His continual disagreements with Guindos caused him to leave office a month before the deadline.
Fernando Restoy was vice president of the National Securities Market Commission (CNMV) from 2008 to 2012 and deputy governor of the Bank of Spain from 2012 to 2016, appointed at the same time as Luis María Linde as governor. What number two of the CNMV at the time of Bankia’s IPO, defended the Commission’s actions in this operation.
In his appearance before the Congress Commission that investigated the origin of the financial crisis, he said that the CNMV promoted transparency and verified that the starting price of Bankia’s shares corresponded to the market price.
After some disagreement with Minister Guindos, in 2017 he assumed the presidency of the Financial Stability Institute (FSI), an international body dependent on the Basel Bank for International Settlements (BIS), known as the “central bank of central banks around the world”. world”. After his first term, in January 2022 he has been renewed in his position.
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