The European Union stress tests on banks vindicated Spain’s push to have the results published, even though five of the country’s lenders didn’t pass, Finance Minister Elena Salgado said.
“The stress tests were published because Spain insisted that they be published,” Salgado said in an interview in Washington yesterday. “We were the first to ask for them to be published.”
Four Spanish savings-bank groups and a bank seized by regulators failed EU stress tests for a combined capital shortfall of 1.84 billion euros ($2.4 billion). All eight Spanish commercial banks tested passed the examination.
About 95 percent of Spain’s lenders were tested, compared with 60 percent for Europe as a whole, Salgado said. “If we had done only 60, all of our savings banks would have passed,” she said.
Spain wanted the results published to combat a public perception that “our savings banks were in a worse situation than they really were,” Salgado said. “We think the transparency benefits us.”
Spain still faces challenges, including reducing the number of savings banks and diversifying the workforce and economy to focus more on the export and technology sectors, she said.
“We need more private-sector investment in technology,” she said.
Spain’s gross domestic product expanded 0.1 percent in the first three months of the year, even as austerity measures threatened to undermine the recovery. As the government fights to rein in the third-largest budget deficit in the euro region, it raised the rate of value-added tax in July, a month after cutting public wages by 5 percent.
Salgado said “of course” Europe is past the worst of its financial crisis. Salgado met yesterday with U.S. Treasury Secretary Timothy F. Geithner in Washington to discuss efforts to strengthen the global economy.