There is nothing like looming holidays to concentrate the mind. After almost a year of tentative talks, flirtatious gestures and failed courtships, Spain's cajas - the unlisted, regional savings and loans institutions - are finally knuckling down to the serious business of survival in the face of mounting bad loans and funding problems.

While prudent regulation and the banks' retail focus may have saved the country's financial system from the worst of the US subprime fallout, they have only managed to forestall the inevitable shake-out forced by the collapse of the housing market.