The Spanish banking crisis is one of the most salient chapters of the Eurozone crisis and follows an extraordinary period of risk accumulation in the Spanish banking system. This paper provides a bird's eye view of the evolution of the Spanish banking system during the first years of the euro, roughly between 1997 and 2007, which were the years of the real estate bubble. It documents the accumulation of real estate risk in the portfolios of both banks and cajas, the private, but politically controlled, savings and loans which are the epicenter of the Spanish banking crisis. Spanish banks and cajas changed their funding patterns, increased their reliance on wholesale funding and made heavy use of securitization vehicles to finance the real estate boom. I argue that governance design flaws in the cajas sector help explain both the run-up and the bust, that the imbalances building in the Spanish economy were well understood by many of the main actors in the drama and that overconfidence in the ex-ante measures put in place by the Bank of Spain to guarantee the solvency of the banking system led to a misplaced sense of complacency.