Five regional Spanish banks fail tests, major banks pass
MADRID — All eight major Spanish banks passed the EU's bank stress tests on their ability to weather a crisis but five out of 19 regional lenders analysed failed, the results…
MADRID — All eight major Spanish banks passed the EU's bank stress tests on their ability to weather a crisis but five out of 19 regional lenders analysed failed, the results showed on Friday.This put Spain top of the list of a total seven banks which failed the tests throughout the European Union which was otherwise given a clear bill of banking health.But Spanish authorities said that the tests had covered 95 percent of their banking sector compared to 65 percent for the EU as a whole.The tests concluded that the five -- Banca Civica, Diada, Espiga, Unnim and Cajasur -- had core capital levels that were too weak to get them through another financial crisis, the Spanish Confederation of Savings Banks said.They will need a total of 2.043 billion euros (2.64 billion dollars) in additional capital to lift their Tier 1 ratio to at least 6.0 percent, the Bank of Spain said.Bank of Spain governor Miguel Angel Fernandez Ordonez stressed that the tests were based on a "highly unlikely" scenario of economic deterioration and it shows that under "normal and predictable" conditions the Spanish financial system is "solid"."The Spanish financial system is totally healthy," he told a news conference after the results of the stress tests carried out on a total of 91 financial institutions across Europe were published.Ordonez declined to comment on how Spain's banking system compared to that in other European nations.Only two other banks -- Greece's ATEBank and Germany's Hypo Real Estate -- fell short of the EU-wide checkup of the sector.The tests carried out on 27 Spanish banks and regional lenders known as "cajas" account for 95 percent of Spain banking system, according to the Spanish government which said other European nations subjected only half of their banking system to the tests.The five cajas which did not pass the stress tests have all been involved recently in the the wave of sector consolidation which has been encouraged by the government and the Bank of Spain.A total of 39 of Spain's 45 regional savings ba
last modification 2010-07-23 20:15:15
Add comment