Spanish Central Bank Says Finance System Solid But Needs More Capital

Spain’s banks will need to keep raising capital to meet regulatory demands over the next few years but the country’s lenders are starting from a solid base, Bank of Spain Governor Luis Maria Linde said on Wednesday.

“Our banks need more capital, and this will be an important matter in the next few years, but the starting point is good,” Linde told legislators in the upper house of Parliament.

Spain’s banks are emerging from a crisis, sparked by a 2008 real estate market crash, and have since returned to profit. The weakest lenders needed a 41.3 billion-euro ($52 billion) bailout from Europe two years ago to rebuild their capital.

That, and a broader restructuring of the financial sector, helped Spanish banks score well in recent health checks by the European Central Bank, Linde said. Only one small bank out of 15 examined was shown to lack capital at the end of 2013.

 
But he added the sector still faced challenges.

“(The sector) faces new regulatory norms … and in that sense, further reinforcements of capital are always welcome,” Linde later told reporters.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza