Spain May Need $76 Billion for Its Banks, Audit Finds
Spain May Need $76 Billion for Its Banks, Audit Finds
Spain’s ailing banking industry could need as much as 59.3 billion euros, or $76.38 billion, in additional capital, according to an independent banking assessment published on Friday that paves the way for Madrid to request bank rescue loans that European finance ministers have agreed to extend.
The number was within the range of previous estimates and well below the potential 100 billion euros, or $128.8 billion, in bailout money Spain negotiated with the other members of the euro zone union in June.
And of the 14 banks assessed by the consulting firm Oliver Wyman, half are not in need of any emergency funds, including Santander, BBVA and La Caixa — the country’s three largest financial institutions.
Presenting the report, Fernando Jiménez Latorre, the Spanish secretary of state for the economy, said at a news conference that Spain would soon probably request about 40 billion euros of the European bailout offer. The audit, he said, should end the debate among investors about whether the Spanish banking sector could survive the consequences of a decade of reckless property lending. After Spain’s real estate bubble burst in 2008, many of its banks found themselves holding growing numbers of loans in or near default.