A bank rescue for Spain could be as much as 100 billion €, and has been accepted by the Spanish Finance Minister, Luis de Guindos. European Finance Ministers held a video-conference on Saturday night, and agreed the deal. The exact amount will not be known until several independent auditors complete their reports on the size of the banks’ shortfall. It the worst case scenario it’s thought that Santander and BBVA will be the only banks not to need any financing. The Eurogroup want Spain to act quickly. Spain’s banks got into bad debt when the real estate bubble burst in 2008, after the previous property boom leading the banks to over lend, and many of those loans have no chance of being repaid. Luis de Guindos gave a press conference on Saturday night to say he had accepted the rescue plan reached and said ‘It is a loan in very favourable conditions, better than those of the market, and it will not leave the slightest glimmer of debt’. The rescue is different from those seen in Greece, Ireland and Portugal because the idea is the money goes to Spanish banks and not the Government. In fact the money will arrived the FROB Spanish Bank Rescue Fund, for distribution, and FROB will act as an intermediary with the Government, diverting the funds to those entities in need. The only conditions imposed by the Eurogroup are on the banks, which are thought to consist of a limit of their dividends policy and in the wages of the Directors. The International Monetary Fund will supervise the program and make sure the money goes only to the financial sector.
You Might Also Like :
0 comments:
Post a Comment