The following is
an excerpt from an article in
The New York Times
Tuesday, August 21, 2012
Clash of Cultures Upends Spain’s Cajas
By RAPHAEL MINDER
VIGO, SPAIN — In the manner of an earlier, more courtly style of Spanish banking, he liked to be called Don Julio by his employees and the businessmen and government officials here in the city where he was born.
And during the more than four decades that Julio Fernández Gayoso ran what eventually became the biggest savings bank, or caja, in northwestern Spain, the institution helped transform the city of Vigo, an industrial port city nearly 500 kilometers, or 310 miles, from Madrid.
It was thus a steep fall from power in late June when Mr. Gayoso, age 80, was forced out after being named as a defendant in a lawsuit filed by anti-fraud investigators.
Whatever the result of that lawsuit, Mr. Gayoso has emerged as a symbol of the clash between the time-honored tradition of the caja as a baronial community institution and the modern, euro-based banking economy that Spain has tried to create in recent decades.
This collision of business cultures played out in various ways among the 45 cajas that operated in Spain until early 2010, more than a year after the real estate bubble burst. Together, these clashes helped bring the country’s banking industry to the brink of collapse, prompting European finance ministers in June to devise an emergency €100 billion, or $123.4 billion, rescue plan for the sector.
In the years before the real estate collapse, Mr. Gayoso and his caja, Caixanova, financed Vigo’s first university campus. They built or acquired some of the grandest buildings along the city’s main thoroughfare. And through Caixanova, Mr. Gayoso became a leading patron of the arts, assembling an impressive painting collection hung at various cultural centers sponsored by the bank.
“This is a workers’ city, but even our Communist painters got so many commissions from him that they portrayed him as a god,” said Carlos González Príncipe, a former mayor of Vigo.
Mr. Gayoso resigned just days after investigators filed suit against him and four other board members, accusing the executives of surreptitiously setting up multimillion-euro retirement plans for themselves after the 2010 merger between Mr. Gayoso’s caja and another savings bank in the Galicia region.
The merged institution, Novacaixagalicia, was Spain’s fifth-largest savings bank, with about 8,000 employees, almost three million clients and annual revenue of €124 billion.
Last year, the state took control of Novacaixagalicia and pumped in €2.5 billion of capital to offset the bank’s burgeoning portfolio of problem loans.
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