Brussels, 21/06/2012 (Agence Europe) - Spanish banks will not need more than €62 billion, explained the Spanish government on Thursday 21 June while eurozone finance ministers were meeting in Luxembourg. No details for individual banks were given - the figure was reached by combining two interim reports by independent consultancies, Wyman of the US and Roland Berger of Germany. The final audit reports will be published at the end of July.
The Spanish government was awaiting these figures before requesting financial aid from its eurozone partners, possibly at Thursday's Eurogroup meeting in Luxembourg.
The consultants study the capacity of 14 Spanish banks, accounting for 90% of Spanish bank assets, to absorb three-year losses on their loans to companies and households, and the banks' ability to respect EU bank funding requirements in the light of two scenarios, one of which is quite likely to occur and the other highly pessimistic, said Fernando Restoy, deputy-governor of the Spanish Central Bank.
Under the more likely scenario, Wyman and Roland Berger say that Spanish banks would need up to €25bn and €25.6bn respectively, while in the worst case scenario, Wyman says between €51bn and €62bn would be needed, Roland Berger €51.8bn.
These figures are nothing like the €100bn cap promised by the Eurogroup a fortnight ago, said Restoy. They are similar to the figures reached by the International Monetary Fund in a similar study. The IMF says up to €60bn and €70bn will be needed, but Spanish banks are strong enough to survive a severe recession in Spain, the capitalisation problems only occurring in a small number of banks already bailed out by the Spanish bailout fund, FROB.
Ever increasing interest rates. The Spanish treasury has rolled over more than €2bn in two, three and five-year debt, but the interest rates charged (Spanish investors make up an increasing proportion of the total) was 5.5% for bonds maturing in July 2017. (MB/transl.fl)