Isabel Cambronero , a classical dance teacher from southern Spain, was on her honeymoon in 2007 when she got a phone call from the head of a local savings bank called Caja Mediterraneo. The banker told Cambronero she had been chosen to sit on the bank's control board.
Cambronero said she was surprised and told the guy she doesn't know much about finance. She said the guy told her it didn't matter and that "you just need common sense."
Cambronero was chosen for the control board job through a lottery — a lottery for customers. These cajas, essentially old-fashioned main street savings banks, but not for profit — would reserve some seats on their oversight commissions for regular folks — depositors, and choose them by pulling their name out of a hat, so to speak.
Cambronero accepted the job and the roughly $30,000 a year it paid to go to a few meetings and rubber stamp the bank's investment plans. It seemed to her a great arrangement.
"In all my time on the board I never saw anything questionable," she said. "Everything had the okay of the bankers. I never knew we were in crisis."
Not until 2011, when the Bank of Spain was literally intervening to save the caja. Cambronero's story is driving lawmakers nuts. You see, Cambronero has been telling it to a parliamentary committee, in Valencia, Spain, where the bank was located.
"How is it possible that everyone just believed what the bankers told them, without questioning anything?" said an incredulous lawmaker. "It isn't logical. For example, did you know that your bank had money in fiscal safe havens?"
Cambronero said it what's crazy is to not trust the people working for the bank.
"It was their bank, and mine," she told the parliament in her final testimony last Monday. "I hold it very dear. It was like a second home. It doesn't occur to you that they're going to do their work badly. It's like when you go to the doctor, you have no reason to doubt his word."
Critics of Spain's cajas say besides clients, the control boards were stacked with political appointees, who earned lots of money, and who had an interest in turning a blind eye.
So by the late 2000s there were 45 cajas, controlling nearly half of Spain's financial system assets, with essentially no reliable oversight.
What exactly did they do wrong?
First, here's what they used to do well.
Lend locally; to neighborhood businesses, to families. This worked for more than a century. Then came the construction fever of the 1990s. When Caja Mediterraneo collapsed last year, it was investing $98 out of every $100 in "ladrillos" or bricks and mortar. And then the construction bubble in Spain burst.
But it got worse, because lately instead of making loans to struggling Spaniards, the cajas have been dealing in Spanish government bonds.
This means that if the banks go under, they could drag the government with them, and vice versa.
Economists call this a feedback loop. Like, when you put an electric guitar too close to an amplifier and the squealing gets louder and louder. To make it stop, to make saving the banks and the government easy, you have to separate them again.
But economists and European officials say for that to happen, European banking rules need a radical overhaul — an overhaul that could take years.