Report: Bank of Spain to rescue stricken savings institution

Spain, its banking system largely untouched in the ongoing world financial crisis, may have to intervene to save regional savings institution Caja Castilla-La Mancha (CCM), state radio RNE reported Sunday, dpa reported.

There was no official confirmation of the report, which stated that the country's central bank - the Bank of Spain - would be taking control of CCM, headquartered in the central Spanish city of Cuenca.

According to the report, CCM had a financial shortfall of up to 3 billion euros (4 billion dollars), though depositors' savings of around 17 billion euros are insured.

A merger with Unicaja savings bank is being considered as part of the rescue plan.

In light of the global financial crisis, Spanish banking federation CECA has recently requested state aid and has warned the government against underestimating the difficulties under which the industry has been labouring.

Due to strict controls by the financial oversight authorities, Spain's banks have so far remained largely unharmed by the crisis. The country's savings banks however have been suffering from a lack of credit brought about by the end of the country's real estate boom.