Brussels, 25/01/2011 (Agence Europe) - On Tuesday 25 January, the European Commission welcomed the new bank capital requirements introduced the day before by the Spanish government for banks in Spain. The new rules will help banks in Spain better fulfil their role of providing lending to the real economy, commented a spokesperson for EU Competition Commissioner Joaquín Almunia. If a public bailout of banks were to be required, explained the spokesperson, the bailout would have to meet EU state aid rules as has already occurred in other member states, like the United Kingdom. On Tuesday, the Spanish treasury rolled over more than 2 billion euros-worth of three and six-month debt at a lower interest rate than charged for similar deals (see related article).
Spanish Finance Minister Elena Salgado unveiled a financial action plan on Monday aimed at removing doubts about the strength of the banking industry in Spain. All banks will have to consolidate their capital to meet the new 8% funding requirement by December 2011. This solvency ratio already applies in Switzerland. It is 1% higher than the 7% rate that the G20 summit agreed upon in November 2011 (see EUROPE 10190 and 10203). The European Union has yet to transpose into its law the Basel III rules on bank capital requirements that are expected to be in force by 2019 at the latest.
Spanish savings banks were restructured in 2010 and are the banks most affected by the new rules. They will be forced to meet an even higher solvency ratio than announced on Monday. The Spanish government wants the banks to raise the €20 billion they will need from the money markets but if the banks fail to come up with a credible recapitalisation programme by September, the Spanish bank restructuring fund (FROB) will lend money to the banks for up to five years. Spain has already spent €15 billion bailing out savings banks, five of which failed the EU stress tests in the spring of 2010 (see EUROPE 10190). (M.B./transl.fl)