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Spanish banks need up to 62bn euros | Spanish banks need up to 62bn euros |
(40 minutes later) | |
An independent audit of Spain's banks has found that they will need up to 62bn euros (£50bn) in extra funding. | An independent audit of Spain's banks has found that they will need up to 62bn euros (£50bn) in extra funding. |
European authorities had already agreed to provide up to 100bn euros ahead of assessments of the banks' needs. | European authorities had already agreed to provide up to 100bn euros ahead of assessments of the banks' needs. |
Earlier, Spanish finance minister Luis De Guindos said his country would officially ask for the aid for its stricken banks "in the coming days". | Earlier, Spanish finance minister Luis De Guindos said his country would officially ask for the aid for its stricken banks "in the coming days". |
He was speaking at a eurozone finance ministers meeting in Luxembourg which will discuss the bailout. | He was speaking at a eurozone finance ministers meeting in Luxembourg which will discuss the bailout. |
That meeting was one of a number of developments on Thursday: | |
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href="http://www.bde.es/webbde/en/secciones/prensa/info_interes/reestructuracion.html" >The estimates of extra funding needed to stabilise Spain's banks came from audits by the US firm Oliver Wyman and German firm Roland Berger. | |
Oliver Wyman estimated between 51bn euros and 62bn euros would be required, while Roland Berger estimated 51.8bn euros. | Oliver Wyman estimated between 51bn euros and 62bn euros would be required, while Roland Berger estimated 51.8bn euros. |
They were asked to work out how much money the banks would need if the Spanish economy were to shrink 4.1% this year, 2.1% next year and 0.3% in 2014. | |
In the adverse scenario they were also asked to model what would happen if house prices fell 19.9% this year, 4.5% next year and 2% in 2014. | |
Their research covered 14 banking groups that account for 90% of Spain's banking sector. | Their research covered 14 banking groups that account for 90% of Spain's banking sector. |
The figures were announced at a news conference by deputy governor of the Bank of Spain Fernando Restoy. | The figures were announced at a news conference by deputy governor of the Bank of Spain Fernando Restoy. |
Mr Restoy declined to comment on individual banks, but said that most of them were deemed to be in a "comfortable" position. | Mr Restoy declined to comment on individual banks, but said that most of them were deemed to be in a "comfortable" position. |
"The [capital needs] are lower than the amount agreed on with the Eurogroup to give security and confidence to markets, with enough room to carry out the restructuring," Mr Restoy said. | |
They were not as large as many analysts expected, according to the BBC's Andrew Walker, who is at the meeting of eurozone finance ministers in Luxembourg. | They were not as large as many analysts expected, according to the BBC's Andrew Walker, who is at the meeting of eurozone finance ministers in Luxembourg. |
"Even so, Spain's banks need massive government help to repair the damage done to their finances by the boom and bust in the country's property market," he said. | "Even so, Spain's banks need massive government help to repair the damage done to their finances by the boom and bust in the country's property market," he said. |
Spain's short-term cost of borrowing - the yields on government bonds - hit a 16-year high on Thursday. | Spain's short-term cost of borrowing - the yields on government bonds - hit a 16-year high on Thursday. |
Madrid sold 2.2bn euros of bonds repayable over two, three and five years. | Madrid sold 2.2bn euros of bonds repayable over two, three and five years. |
It paid a yield of 6.07% on five year bonds, up from 4.96% in May. | It paid a yield of 6.07% on five year bonds, up from 4.96% in May. |