Spanish bank rescue would cost almost €60-billion: audit |
| Globe and Mail - Sep 28, 2012 |
Spanish banks will need close to €60-billion ($77.24-billion U.S.) in new capital, according to the results of an independently conducted stress test of the country’s 14 largest lenders that Madrid hopes will dispel investor doubts over the true extent of losses in the sector.
Seven out of the 14 Spanish banks under review failed, according to the results of the three-month so-called “bottom up” review, which involved the individual assessment of 115,000 loans making up 11 per cent of the value of the sector’s total credit assets.
While the bulk of the failing banks were institutions already nationalized or that had taken state aid, Banco Popular, Spain’s sixth biggest bank by assets, will need to raise €3.2-billion according to the test, just below its €3.58-billion market value - meaning it will probably need state aid to survive.
Madrid hopes the tests, conducted by the consultancy Oliver Wyman aided by the Big Four auditors under the supervision of the European Central Bank and International Monetary Fund, will finally restore confidence among investors that no more surprises lurk in the Spanish banking sector.
Read Full Article from Globe and Mail
- Posted: 2012-09-28 13:45:46
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