Spain savings bank mergers a mid-term strategy -govt

MADRID, May 30 (Reuters) - Spain's savings banks may need to consider mergers in the medium term but for the time being they have not identified any risk situations, newspaper El Economista's on-line edition said on Saturday, citing the economy minister.

"Consolidation would be a medium term strategy for the savings banks because in the short term they have not identified any risk situations," Economy Minister Elena Salgado was quoted as saying in response to a question on possible mergers amongst Spain's 45 savings banks.

Salgado was speaking at a conference in the seaside town of Sitges near Barcelona.

The minister said it was up to the savings banks to decide on how the sector will be restructured and not the government.

Any consolidation deal has to be proposed to the Bank of Spain and get the green light from the regional governments which control the savings banks, Salgado said.

But Spain's financial system "has an excess of capacity for a time of crisis like this", she said.

In March, the Bank of Spain was forced to take over the running of savings bank Caja Castilla La Mancha and provide 9 billion euros in government guarantees to back the bank after its planned merger with savings bank Unicaja failed.

CCM was the first savings bank to be bailed out during the global crisis.

Some analysts estimate the country's savings banks could face a capital gap of as much as 60 billion euros as the deepening recession fuels bad loans.