Parties Agree on Spain Bank Restructuring; Bank of Spain Takes Over Savings Bank

MADRID—In a joint effort toward financial reform, the government of Spain and the conservative opposition Popular Party (PP) have agreed to accelerate the restructuring of Spain’s financial system.

Part of this included facilitating Fund for Ordered Bank Restructuring (FROB) access to the roughly one third of Spanish savings banks in need of restructuring, so they could complete mergers before June 30.

The government created the FROB in June 2009 with initial capital of 9 billion euros ($11.2 billion) as a means of ensuring a stronger and more solvent Spanish banking system. The fund may legally be multiplied ten-fold through outside ...