The present financial crisis has severely hit the Spanish savings banks sector. Of 45 savings banks in 2007 by the end of 2012 the number had dropped to only thirteen. Most of the institutions that have disappeared, have been consolidated into major groups, either by outright purchase by banks or as a result of merging operations among individual savings banks. The Bank of Spain and the Fund for Ordely Restructuring of the Banking Sector (FROB) have bailout seven savings banks or group of savings banks, and four of them have been nationalized. Moreover, nearly all merging operations have required the consumption of public resources, which in turn have increased the already large government budget deficit. First, the paper presents a short history of the savings banks crises, and shows that until very recently the sector has surmounted major crisis affecting the financial system. Their limited scope and scale, the principle of territoriality, and a prudent and conservative management avoided saving banks the financial turbulences suffered by the commercial and investment banks. Second, the paper reviews the causes of the current savings banks crisis and which have been the procedure and the cost of its resolution, which has required the astonishing figure of 60,000 million euros provided by the European Stability Mechanism.
