Bank of Spain’s Ultimatum to Cajasur and International Trade Payment Methods
Bank of Spain’s Ultimatum to Cajasur
The Bank of Spain has issued an ultimatum to Cajasur. The Bank urgently summoned the president of Cajasur and conveyed the message that the bank has to move forward with the Cordoba merger, introducing the joint business plan for Unicaza on Tuesday, December 1st. Otherwise, the alternative for the supervisory deck, through December 10th, when the executive committee of financial authority meets, would be to initiate proceedings to consider the institution at risk. This would trigger the intervention of the same, and actions such as opening a file on the board, the withdrawal of its governing bodies, and the takeover by the financial authority to be responsible for the settlement of losses, depreciation expenditure, and public auction of the entity.
The Bank of Spain did not accept discussing merger alternatives, no longer considered possible, or direct aid to Cajasur. These were approved by the council of the bank, which on Wednesday turned down the lead business plan due to a surplus of 988 staff and 236 workers for Unicaza Cajasur. They add that an intervention will not guarantee employment. The Supervisor will declare talks broken if it does not receive the document on the 1st, so that the machinery will be launched the same day by a formal notice to both entities.
From the bank’s perspective, intervention is considered the worst of starts, but it ensures that “we have no ability to redirect this because we cannot approve a plan that costs 1000 layoffs and a budget of merger costs, which would not get compensation for non-traumatic [layoffs] and that seems to force a [Expediente de Regulación de Empleo – ERE].”
International Trade Payment Methods
Simple Batch Exporter
In the simple batch, the exporter sends the goods to the importer, together with the documents accompanying the bill of exchange. The bill of exchange can be processed directly by the exporter or through their bank. It is a means of payment whose initiative rests with the exporter, who reinforces security compared to other figures because the debt is covered in an accepted bill of exchange.
Documentary Remittance
The documentary remittance is used quite often to avoid risks that may arise when making the delivery of documents of the merchandise prior to acceptance. It is intended that these can be analyzed by the importer to verify that they meet the requirements specified in the contract between them. It is a widely used means of payment, with an adequate level of security for both sides, since delivery of the goods is simultaneous with payment or its legal commitment, through acceptance.
Documentary Credits
Security in the collection and other multiple risk factors, if indeed present with all their harshness in domestic trade, multiply in foreign transactions. The documentary credit is a widely used means of payment in international trade that combines the interests of the importer and exporter, minimizing the uncertainty of the parties. Given its high use and development as a means of payment, there are supranational rules for its implementation, and these are reflected in the Uniform Customs and Practice on documentary credits.
The documentary credit is an effective means of payment through which the importer, called the payer, goes to a bank (issuing bank) so that they open a letter of credit in favor of the exporter (beneficiary). It indicates that the bank will pay the price reflected in the transaction against delivery of documents specified in the letter and that they involve the dispatch of the goods destined for the importer.