Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Spain’s Top Seven Banks Need $88 Billion as Buffer, RBS Says

Don't Miss Out —
Follow us on:

May 9 (Bloomberg) -- Spain’s biggest seven banks need 68 billion euros ($88 billion) of additional capital as a buffer against bad loans and to meet regulatory requirements, according to Royal Bank of Scotland Group Plc.

“Not only only do banks need to raise more provisions against 323 billion euros of real estate exposure, but insolvencies are rising steadily on other loans too,” Alberto Gallo, the bank’s head of European credit strategy, wrote in a note.

Using public money to fund the lenders may “result in a vicious circle of austerity,” Gallo said, which could create higher unemployment and increase insolvency rates.

Spain should follow the Swedish bad bank model used in the 1990s, he wrote. That would mean sharing the burden of recapitalisations with private investors and allowing bondholder losses on non-viable banks.

Link to Company News:{BBVA SM <Equity> CN <GO>} Link to Company News:{BKIA SM <Equity> CN <GO>} Link to Company News:{BKT SM <Equity> CN <GO>} Link to Company News:{CABK SM <Equity> CN <GO>} Link to Company News:{POP SM <Equity> CN <GO>} Link to Company News:{RBS LN <Equity> CN <GO>} Link to Company News:{SAB SM <Equity> CN <GO>} Link to Company News:{SAN SM <Equity> CN <GO>}

To contact the editor responsible for this story: Michael Shanahan at mshanahan3@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.