24 August 2018
A report from the Bank of Spain criticised Sareb regarding its conduct in the 2015 asset sales. The banking supervisor questioned the processes behind the purchases, approvals, executions, donations and sales of real estate assets. One report highlighted that the semi-public entity failed to analyse the operations adequately, nor did it undertake any serious assessment of the negotiation and the results.
According to El Independiente, the Bank of Spain’s report criticised Sareb’s conduct at a number of levels:
– Expenses: the supervisor criticised the mechanisms Sareb had in place to approve expenses. For example, the regulator stated that when there were contract extensions, if they were to occur in the next tax year and were not budgeted in advance, they did not consider the initial expense, so the approval was determined regardless of any previous expenditures.
– Write-offs: the agency shows that Sareb had no control over the approval of debt write-offs benefitting buyers (Sareb received less money when disposing of assets).
– Questions about internal organisation: the BdE criticised Sareb’s organisational structure and highlighted failures in communications between departments, diminishing efficacy.
– Unreliable solvency analysis: Sareb’s valuations of risk positions were unreliable. The BdE also noted that the entity did not periodically review the assets it allocated to its direct management department.
Original Story: Idealista
Translation: Richard Turner