European Markets Fall; Spain Seizes CajaSur

Arthi Gupta, Mayank Mehta and Sanjay Barot
24 May, 2010
New York City

The European markets fell on lingering concerns that the bailout package may not contain the deepening financial and fiscal crisis. Bank of Spain takes forced to take over a regional savings bank CajaSur. U.K. Chancellor proposes

[R]5:00 PM Frankfurt, Paris; 11:00 PM New York – The European markets fell on lingering concerns that the bailout package may not contain the deepening financial and fiscal crisis. Bank of Spain takes forced to take over a regional savings bank CajaSur. U.K. Chancellor proposes £6.2 billion in spending cuts.[/R]

The European markets declined on lingering concerns that the nearly $1 trillion euro-zone bailout package will not be enough to contain the region’s debt crisis. Bank of Spain seizes the savings bank CajaSur. U.K. Chancellor sets out £6.2 billion spending cuts.

The Bank of Spain said this weekend that it had taken over the running of Cajasur, a regional savings bank controlled by the Vatican, after it experienced financial difficulties and a merger plan with another of the country''s small lenders failed.

The Bank of Spain seized savings bank CajaSur and appointed an administrator on Saturday. The regulator acted soon after CajaSur''s plan to merge with a bigger lender Unicaja failed. The central bank said CajaSur will continue to operate normally and fulfill its obligations.

CajaSur posted a net loss of €596 million in 2009. CajaSur was the second Spanish bank to fail since the start of the global financial crisis. The central bank seized control of Caja Castilla-La Mancha in March 2009.

CajaSur controlled by the Roman Catholic Church accounts for 0.6% of the total assets in the Spain’s banking system.

Crude for July delivery declined 16 cents a barrel to $69.88 and gold for June delivery increased $8.7 an ounce at $1184.8.

U.K. Chancellor of the Exchequer George Osborne on Monday detailed a £6.25 billion spending reduction plan for this year that aims to slash a record deficit.

Real estate investment trust Equity One Inc. said on Sunday it has agreed to acquire Capital and Counties USA Inc. through a $600 million joint venture transaction with its parent company, U.K.-based Capital Shopping Centres Group Plc.

The dollar improved to 1.2390 versus the euro and has moved back toward a recent 4-year high of 1.2143.

Italy''s independent refiner ERG SpA and French oil giant Total SA received European Commission approval to set up their joint venture named Totalrg.

In London FTSE 100 Index traded higher 7.98 or 0.16% to 5,070.91, in Paris CAC 40 Index increased 5.33 or 0.16% to close at 3,436.07, in Frankfurt DAX index lower 27.39 or 0.47% to close at 5,801.86. Markets in Switzerland were closed today.

Gainers & Losers

BNP Paribas SA, the bank rose 1.1% to €46.74.

CNP Assurances (CNP) SA, the life insurer fell 0.1% to €59.58.

Credit Agricole SA, the financial services provider rose 0.7% to €9.40.

L''Oreal SA, the cosmetics maker rose 0.08% to €73.74.

Natixis SA rose 0.8% to €3.59 after the investment bank was upgraded to “market performs” from “underperform” at Keefe, Bruyette & Woods Ltd.

PPR SA rose 1.9% to €92.50.

Safran SA, the maker of aircraft engine rose 0.9% to €21.43.

Societe Generale SA, the bank rose 1.2% to €35.70.

Television Francaise 1 SA rose 1.0% to €11.55.