The Spanish banking system has been credited as one of the most solid of all western banking systems in coping with the ongoing worldwide liquidity crisis, thanks to the country's conservative banking rules and practices. Banks are required to have high capital provisions and to demand various guarantees and securities from intending borrowers. This has allowed the banks, particularly the geographically and industrially diversified large banks like BBVA and Santander, to weather the real estate deflation better than expected. Indeed, these banks have been able to capitalise on their strong position to buy up distressed banking assets elsewhere in Europe and in the United States.
Nevertheless, with the unprecedented deepening of the country's housing crisis, smaller local savings banks ("caja") are known to have delayed the registering of bad loans, especially those backed by houses and land, to avoid declaring losses. This has occurred despite the fact that these credits are backed by the borrower's present and future assets.
CCM (Caja Castilla la Mancha), is still the only local savings bank to have suffered a run by depositors. The central bank Banco de España (equivalent of the US Federal Reserve) forcibly took over CCM to prevent its financial collapse. PricewaterhouseCoopers estimated an imbalance between CCM's assets and debts of €3,500 million, not counting the industrial corporation. One of the investment mistakes this bank had indulged in during the height of the property boom was the funding of the airport Ciudad Real Central Airport at Ciudad Real. It turned out that no airline wanted to operate from there, resulting in a financial fiasco (as well as wasting a lot of land and ruining vistas). There were still further errors leading to the present situation. On May 22, 2010, the Banco de España took over another "caja", CajaSur, as part of a national program to put the country's smaller banks on a firm financial basis.
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