Spain stands behind savings banks to stave off crisis: "Spain’s move to stand behind its ailing savings banks has staved off a full-blown financial crisis and saved the eurozone’s third largest deficit country from an immediate further downgrade of its sovereign debt.
The effect has been to strengthen bank balance sheets, helping the country prepare for the next round of European bank stress tests in July. Spain’s credit default swaps, which measure the cost of insuring government debt, rallied from 361 basis points on January 20 to 228bp on Friday morning last week.
The most important factor has been reform and consolidation of the cajas, or savings banks, which have been reduced from 45 to 17 over the past six months, according to the Spanish Treasury. Tough new capital ratios are overseen by the Fondo de Reestructuración Ordenada Bancaria (Frob)."
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