The mismatch of credit in the banking system and the action of social economy: the path of restructuring

Abstract

During the last five years, after the beginning of the financial crisis in 2007, one of the major banking restructuring was caused, both in a global perspective and in a domestic dimension for Spain. The credit entities of the social economy, savings banks and credit cooperatives, have led an extraordinary concentration process. The first credit entities, suffered a radical transformation that has modified their corporate structure by converting many of them into banks, and consequently, its business model. From another perspective, the crisis has revealed the failure of financial institutions to fulfill their primary mission as credit entities. Its threatened solvency, the need to implement a strict risk control and the high default rates have led to an unprecedented restriction of lending which has ended up crushing much of the real economy or production. The three financial reforms approved by August 2012 have generated certain “discredit” between society for its direct and indirect high cost that bind to the "discredited" by the credit squeeze that the sector and reforms imposed