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Podemos delves deeper into their plan to resurrect public banking

| News | Corporate Law and M&A

Miguel Prado analyses what the creation of a public bank would mean

Pablo Iglesias, second vice-president of the government, took a chair in the Council of Ministers and Bankia felt a chill. Not because of his thoughts on taxes, nor his social policy, nor his approach to Spain. It was his idea of creating a public bank that brought down the price of the financial institution. In January it was 16.77%, and that finance concept was largely to blame. He always had in Bankia in his sights, although his arrival in the Government has brought him to widen the target to the Institute of Official Credit (ICO) too. One as a commercial bank and the other as an investment bank, as ABC has learned.

The widening of the target was revealed in a recent interview in La Sexta. It had been a long time since the secretary general of Unidas Podemos spoke about this and it was a surprise. He revealed that Sánchez agreed to create an entity of this kind, and then pointed to the ICO as a necessary change for our country. Not a word about Bankia, which was interpreted as a step backwards in his intentions to use the entity as a public bank. But ABC has been able to confirm where his party's approach is heading. Sources from Unidas Podemos explain that they want to keep Bankia nationalized and use it as a commercial bank with three specific objectives: "to be a counterweight to the oligopoly of the big banks; to avoid ''financial exclusion'' (ensuring services, for example, in more depopulated areas) and to give good advice to SMEs. If it seemed that in the last interview Iglesias was reluctant, now his party is coming back with more strength. Two positions depending on your viewpoint.

 "Today there is no bank that needs to be rescued, we are not in the same situation as 10 years ago, when there was a need. It's a very romantic idea, but, honestly, after what happened to the banks, it wouldn't be viable in the short term," says Miguel Prado, partner in the Financial Regulation and Fintech Area of Andersen Tax & Legal. He adds: "From a regulatory point of view, creating a public bank would mean a change in the shareholders and management. And during the financial crisis the State entered the management by necessity, not by will".

You can read the full story published by ABC

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