Juan Ojeda is a local politician who worked at CajaSur bank for many years.
Juan Ojeda is a local politician who worked at CajaSur bank for many years. Chana Joffe-Walt/NPR
The fate of Spain's economy may lie in a couple dozen savings banks called cajas de ahorros. These banks, like CajaSur above, hold more than 50 percent of Spanish bank deposits and many are in danger of failing.
Cajas started out as small local institutions that took deposits and made small loans, but when Spain entered the eurozone that changed. Suddenly everyone wanted to lend Spain money and the cajas starting financing large construction projects — one built an airport in La Mancha, another opened a theme park. Now many of these loans are going bad, and the future of these cajas is being questioned.
On today's Planet Money, we explain why these tiny Spanish banks, pose a threat to the global economy.
For more: Check out this report from the Bank of International Settlements that shows how much various banks and governments have lent to each other.
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