The European Commission has welcomed Spain's announcement of how much capital its banks need, saying the exact amount of public funds to be injected into the Spanish banking sector would be determined in coming months.
Spain's banks would need €59.3 billion in extra capital to ride out a serious economic downturn, an independent audit of the country's 14 main banks by consultancy Oliver Wyman showed today.
The worst-case estimate, which does not take into account tax credits or future bank plans to raise their own capital, is based on a scenario of a 6.5 per cent contraction in Spain's economy between 2012 and 2014.
The audit said half of the 14 banks need more capital, with a €49 billion shortfall for banks that have already been nationalised.
"This is a major step in implementing the financial-assistance programme and towards strengthening the viability of and confidence in the Spanish banking sector," the Commission said in a statement.
"The necessary state aid provided to Spanish banks will be determined in the coming months. It will be based on today's published results," the statement said.
The Commission said the final amount will be reduced by measures to be taken by the banks, such as the disposal of assets, other restructuring measures and tapping funding markets, and subordinated liability exercises.
"In addition, the capital shortfall of credit institutions receiving public funds will be adjusted as a consequence of the transfer of assets to the Asset Management Company," the Commission said.
Reuters