ABSTRACT
The international financial crisis hit Spain after a long period of economic growth. After dealing with the first blow, weakened real estate, highly leveraged, with credit highly concentrated in savings banks, and an international public debt crisis, unleashed a double-dip crisis producing a record 26% unemployment rate—deeply impacting families and business—and a total restructuration of the financial system, including the conversion of nearly all savings banks into banks. The ∊62 billion net cost of the crisis (a little bit more than 6% of GDP), was provided by public domestic or European agencies, so Spanish taxpayers will ultimately pay it. A rather split accounting standard-setting framework played a passive or reactive (i.e., non-existent) role during the crisis. The only significant change in accounting regulation came as a political move to avoid a rescue from international institutions: In 2012, the economic authorities imposed a major impairment of construction and real estate credits, which depressed the weak situation of most financial institutions. Accounting standard setting in Spain is still regarded as a stewardship economic tool that may be managed by the government to reach political goals.
