Spain's Bankia: One last bailout

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Spain's Bankia: One last bailout

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The head of the troubled Spanish bank, Bankia, has insisted that if the lender receives the 19 billion euros it asked for on Friday, it would not need any further funds to continue as a solid business.

At a conference in Madrid, the bank’s chief executive, Jose Ignacio Goirigolzarri also promised greater transparency shortly after announcing huge losses.

“We understand this group will not need any additional provisions; no additional money,” he said.

“We think with this we can make a financially solid entity that, together with the number of clients we have, will allow us to be optimistic and trust in the development of a solvent, efficient and profitable entity.”

The call for financial aid shortly follows the downgrade by Standard & Poor’s of Bankia and four other Spanish banks to junk status on Friday.

The banks were downgraded due to their high exposure to the country’s collapsed real estate bubble.

The banks all hold large amounts of soured investments, such as defaulted mortgage loans or devalued property. Bankia, the worst hit, holds 32 billion euros of these so-called ‘toxic assets.’