Spain’s banks safer than feared
SPAIN is set to decide how much it needs to borrow from the Eurozone to recapitalise its troubled banking sector, with BBVA boss Francisco Gonzalez yesterday predicting it will come in well below the maximum offered by the currency union.
The chairman of Spain’s second largest lender said he expects the independent stress test by consultancy Oliver Wyman to show Spain’s lenders need between €70 (£56bn) and €80bn.
But that includes the €20bn already given to them, and so means the government could ask for €50 to €60bn from the Eurozone, which offered a credit line of up to €100bn to help the sector.
“We’ll know in the next few days, in a week. We’ll get a figure of around €70, €75 or €80bn,” Gonzalez said.
He also said BBVA may deposit assets in a “bad bank” in which troubled lenders will park their toxic real estate assets to later sell them off. He however said he was not willing to take a stake in the mechanism in the short-term.
Meanwhile the Spanish government comfortably borrowed on the bond markets yesterday.
Yields on 10-year bonds fell to their lowest level since January, allowing the government to borrow €4.8bn at a relatively healthy of 5.666 per cent.