An independent audit of Spanish banks has found the country’s troubled lenders would need 59.3 billion euros to stay solvent if there were a serious economic downturn in the country.
After hearing the result of the stress tests, the economy ministry said it would not ask for more than 40 billion euros of the 100 billion lifeline that has been offered by the European Union.
Bank of Spain official Fernando Restoy said: “The capital requirements estimated for the entire system are roughly in line with what had emerged from a more limited audit done in June. This is much less than the total of financial aid available, set out in the Memorandum Of Understanding we have with Brussels.”
The more than 59 billion euros capital shortfall figure is based on the worst case scenario – that is if Spain’s economy shrank by 6.5 percent between now and 2014.
The audit was a necessary steps before Madrid could ask for EU aid, something which the financial markets believe it will have to do sooner rather later and which would trigger a bond-buying programme by the European Central Bank.
About half of the 14 banks that were audited were found to have capital needs in the most part from the bad loans thrown up by the bursting of the property bubble there.
However some of those loans will be transferred into a so-called “bad bank” set up by the government.
The audit identified the bulk of capital needs at the four banks which have already been rescued by the Spanish government.
The worst case is Bankia, the result of an ill-fated, seven-way merger between unlisted savings banks which was taken over by the government earlier this year.
The capital shortfall for these banks is 49 billion euros, with Bankia accounting for half of that.
Copyright © 2015 euronewsMore about:
- 1Greece rejects austerity in tense meeting with eurozone’s bailout chief
- 2Setback for Greek government’s Pireaus port renegotiation plan with Chinese
- 3Athens under pressure over EU/IMF aid
- 4Russia cuts interest rate in surprise move seen as recession response
- 5EU macro regions – a way to resolve issues with your neighbours?
- 1Business Line: Greek election aftermath, Russia’s rating cut and mixed news from Microsoft
- 2EU macro regions – a way to resolve issues with your neighbours?
- 3Gazprom profits suffer from Ukraine, oil slump and rouble’s fall
- 4McDonald’s boss to step down after sales slip
- 5Russia unveils anti-crisis plan to save banks, but light on details
- 1So what exactly is quantitative easing, and how is it going to get the eurozone growing again?
- 2Eurogroup leaves door open for Syriza to partially renegotiate ‘if necessary’
- 3EU macro regions – a way to resolve issues with your neighbours?
- 4What is social innovation and why is it good for business?
- 5Ebola, poverty and inequality pleas at World Economic Forum in the name of good business
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2The power of the pen: Cartoonists worldwide react to the Charlie Hebdo attack | euronews, world news
- 3Immigration, racism in sport and the rise of extremism – Cantona shares his views | euronews, interview
- 4[LIVE] 12 dead after gun attack at French satirical weekly Charlie Hebdo | euronews, world news
- 5[LIVE NOW] Massive unity rally in Paris, with similar marches in other French cities | euronews, world news
- 6Muslim groups fear backlash after terrorist attacks in Paris | euronews, news
- 7[LIVE] Confusion over reports two killed in Paris shootout, as police close in on Charlie Hebdo suspects | euronews, world news
- 8“ISIL is the baby of George W Bush” | euronews, news
- 9Medieval Bruges is to get its own underground beer pipeline | euronews, world news
- 10Almost four million turn out for unity rallies across France | euronews, world news
- 11International breaking news | euronews online world breaking news in video
- 12NewsWires : euronews : the latest international news as video on demand
- 13A defiant Charlie Hebdo: it’s not the front page the terrorists would’ve wanted | euronews, world news
- 14Key questions around the Charlie Hebdo killings go unanswered | euronews, world news
- 15Getting to know Sir Tony and “the world’s greatest tenor” | euronews, musica
- 16HarperCollins wipes Israel off the map | euronews, world news
- 17euronews apps : iPhone, iPad, Android, Windows Phone 8, Windows 8, Nokia S40, Nokia Asha, Smart TV and Google Glass
- 18eurovibes - a selection of Europe’s best music talent
- 19Grim task of retrieving bodies after wreckage of missing AirAsia plane found | euronews, world news
- 20Charlie Hebdo: Israeli paper deletes women from Paris march | euronews, world news
Wires > Business
- 01:07 CET UK asset managers weak on disclosing environmental, social…
- 00:39 CET Aviation leaders seek new safety mandate after deadly 2014
- 00:36 CET Honda says fatal crash involved Takata air bag inflator rupture
- 00:06 CET ECB’s Praet says QE will help fend off damaging deflation
- 23:23 CET Aviation leaders seek new safety mandate after deadly 2014
- 21:22 CET Oil surges 8 percent as U.S. rig count plunges, shorts cover
- 20:54 CET Oil surges 8 percent as U.S. rig count plunges, shorts cover
- 20:29 CET Sun Pharmaceutical wins U.S. approval to buy Ranbaxy