Spanish Law Reform on Saving Banks: Royal Decree-Law 11/2010

With the aim of pushing forward the Spanish financial system, the Royal Decree-Law 9/2009 was enacted on 26 June 2009 (hereinafter, the «RD 9/2009»). The RD 9/2009 set up the «Fund for the Orderly Restructuring of the Banking Sector» (hereinafter, the «FROB»). The main purpose of the FROB was to provide support to any merger or similar amalgamation between financial institutions (in particular, to support the merger of Saving Banks), in order to increase their efficiency and to strengthen their position in the market.
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From the enactment of the RD 9/2009, restructuring processes have mainly been carried out through mergers or amalgamations. The aim of each of those mergers has been to create the so-called «Institutional Protection Systems», also known as «cold mergers» (hereinafter «IPSs»). IPSs are entities (the «IPS holding Company») created through the agreement of a group of other financial institutions (the «Founders»), with the aim of providing each other with enough solvency and liquidity to face their respective obligations vis-à-vis the market and their customers.