Transparency 25: Communal Granary, Mount of Piety and Saving Banks.
In Digital Veterinary is unusual discuss issues seemingly unconnected with agriculture-livestock sector but we believe that the situation adequately illustrates the evolution in the last centuries of the sector in a European country. To situate this is a country whose name I do not remember as the illustrious Don Miguel said.
In that country uncontrolled risk management, most of the savings banks has led to having to ask for outside help to cover their economic problems (June 9, 2012) and even a minister insisted again and again in his appearance, to the press that only conditions are imposed on banks, but not to society in the fiscal area, or macroeconomic, or political, it is clear that the Eurogroup agreement that if the banks fail to be profitable with European capitalization, taxpayers who ultimately accountable to Brussels money back. We will try to explain here the reasonable doubt to what situation we are.
All started in XVII and XVIII centuries when the communal granaries were created: municipal or religious institutions whose main task was stockpiling grain (mainly wheat and rye) to provide, to farmers in times of scarcity. The instrument resulted effective and in 1751 the State makes his first appearance creating the Superintendency of Communal granary, under the Ministry of Grace and Justice regulating and centralizing administration. In 1885 there were 76 buildings belonging to communal granaries.
Similarly, between 1550 and 1702, Mount of Piety religious institutions that allowed access to credit for farmers, artisans and small traders, without interest and with only the guarantee of a deposited garment that could be rescued later appear. In the seventeenth century, Mounts of Piety are operated by the state, apparently keeping the charitable religious inspiration of its founding.
Finally the appearance of Saving Banks starts in the liberal triennium 1820-1823, are an evolution of the Mounts of Piety, and are constituted as private foundations, non-profit, ie not have shareholders or can be distributed dividends and its purpose is make social work in their respective territories.
Its state regulation came quickly and starts with the Royal Order of 1835 involving in this task, as the foundational text itself, people “wealthy” and “philanthropic spirit” or public goods that are necessary for this purpose. The first entity adapted to state legislation that has documentation is Caja de Ahorros de Madrid on October 25, 1838 and subsequently appear, copying the centralized model, those of Granada (1839), Santander (1839), Sagunto (1841 ), Valladolid (1841), Seville (1842), La Coruna (1842), Barcelona (1839-1844), Valencia (1851) and Sabadell (1859). In all these cases the savings banks are linked to the Mounts of Piety, whether prior or simultaneous creation due to distrust of official credit.
Missing the Communal granaries and established Savings banks and Mounts of Piety, the state makes a second operation in 1853 definitely opens up the current situation. So the most important provision of Royal Decree is in its Article 4, forcing deposited in the General Deposit and Consignment capital not invested in the Mounts of Piety. This General Safety was a state agency that had the function of investing in securities of consolidated deficit.
Thus, for the first time linking Savings banks and Mounts of Piety to finance the deficit appears,
link that materialized in a significant decrease of the deposits in the following years to distrust the financial solvency of the state. Therefore we have, from this time, a triple function of the Savings Banks: drive private savings to productive activity, support charitable activities and fund the public deficit.
These functions will be joined by the management of old age pension designed by the National Insurance Institute created in 1908. So entities are renamed: Pension Fund Aging and Savings or savings bank and Mount of Piety that finally were merged resulting in savings banks in each geographic area.
Latest interventions that have led to the current situation have been the abolition in 1971, the Institute of Credit Savings Banks are transferred its administrative, control and inspection to the Bank of Spain and in 1985, the enactment of the Law Regulation of Basic Standards Governing Bodies of the savings banks that opened the doors for the presence in the General Assembly, the Board of Directors and the Supervisory Board of representatives of municipal corporations, public administrations and institutions and public corporations.
Consequently, eliminated in practice the functions on pensions (assumed temporarily by the Social Security), with limited social function and a country of agriculture and livestock in recession, the only functions that remains are the financing of public deficits and financing public or private works (economical alternative to agro-livestock). Controlled and confiscated by the same public entities to whom they give credit, most of the Savings banks have been maintained more or less tight to the purpose for which they were born, which is to service the whole of society but have become in financial institutions generally lose their social character of nonprofit entities, to promote economic development of the environment in which they are located, going to act procedures incurred in situations of financial and alleged irregularities of all kinds risk.
At this point we must remember that although some of these entities have camouflaged his name, and now seem banks, economic deficit is from the granaries, Mounts of Piety, Saving banks and Pension Funds permanently seized by the State since XXVII century to this day and which have been funded, usually with money from private savers, public or private works that correspond to inefficient state model (roads and railways) or ghosts buildings like airports where planes do not land, highways that lead nowhere, amusement parks for the greater glory of those who inaugurated, residential areas rezoned from agricultural lands that are uninhabited and other infrastructure whose serious relationship endless.
We must not forget that from 1985 to present major political parties (2 national and 2 regional) are the dominant associations in all current savings banks which leads to those who control the Bank of Spain (driver and inspector to his instead of savings Banks), municipal corporations and governments (members of both Assemblies, Control Committee and Board of Directors of savings Banks) are the dominant associations in the same savings banks to resorting to obtain loans and investments, some of dubious profitability.
We also point out that the current process of nationalization of Savings banks should really be called renationalization (the state’s has consistently intervened) and that subsequent audits, capitalizations and public auctions or rescue with Eurogroup money, demand not only of a crystalline transparency but also the assumption, economic and criminal of those who have led to the current situation and they finished paying all citizens previous responsibilities policies.
Finally summarize saying that four entities created as stores of grain for farmers (Communal granaries), access to interest-free loan to farmers and small businessmen or professionals (Mounts of Piety), drive private savings to productive activity and invest the proceeds in social work (Saving Banks) and manage pensions (pension Funds) have been controlled after several state measures (1985.1971, 1908, 1853 and 1835), by associations linked to political parties of all political persuasion who have served initially excellent instruments.
From Digital Veterinary we ask:
1. Different state interventions were intended to improve, for the general population, the instruments created by other sectors of civil society?
2. Why in the legislation of 1985, prior to the accession to the European Union, the activities of the Saving banks were not addressed to the original purpose of the Communal granaries, Mounts of Piety and Savings banks to preserve a primary productive activity such as agriculture and livestock?
If we get answer to these two questions may also know why the agriculture, fisheries, steel and mining, among others, are broken and that answers that leave no doubt about topics related to business instrumentalization of activities are still waiting public, BOE, Red Cross, Expo 92, AVE, reserved funds, Orphans funds, selling gold reserves, grants to organizations for purposes unrelated to the country’s needs, SREs, European Development fund, expropriation of activities or groups business, Spanish Medicines Agency, subsidies …… lobbies business groups and others who face daily, for years, in the media.