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Bank of Spain Said to Weigh Uniform Refinanced Loan Criteria

The Bank of Spain wants to refine rules spelling out how banks should classify refinanced loans, said two people familiar with its plans.

The regulator wants to impose more uniform criteria for classifying loans that have been refinanced by banks, said the people, who asked not be identified because the information isn’t public. Banks use some discretion when classifying their refinanced loans and the regulator wants to set limits to that, the people said.

Increased refinancings by banks as Spain’s economic slump drags into its sixth year have attracted the scrutiny of analysts concerned that the practice may disguise loan losses. Spain’s banks have restructured about 140 billion euros ($182 billion) of loans outside the country’s real estate industry, according to Oliver Wyman, the consulting firm that did a stress test of Spanish lenders last year.

El Pais reported the plans yesterday. Officials for the Bank of Spain and Economy Ministry declined to comment.

To contact the reporter on this story: Charles Penty in Madrid at cpenty@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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