Fitch: Doubts Persist on Spainish Financial System

Spain is on the brink

Inquiring minds are across the Atlantic this morning about the persistant doubts of the Spanish financial system:

Increasing the required core capital ratio for the savings banks is a correct measure to take, but it does not eliminate the doubts on Spain’s financial system, according to Fitch rating agency, cited by Expansion. The economic daily reports that the September deadline indicated in the plan announced by the government by which the banks and rural cooperative banks must have core capital ratios of at least 8%, is too far away. Today Second Deputy Premier and Minister of the Economy Elena Salgado said that the unlisted savings banks will have their core capital targets increased to 9% or 10%. Fith believes that the programme does not introduce sufficient stimulus to create interest in the private sector to invest into the savings banks. The Ministry of Economy predicts that most of the 20 billion euros needed by the sector for recapitalisation will come from private investments; but the rating agency believes that there are still many doubts about the quality of the assets, especially regarding the savings banks, for them to be enticing to private investors.

Hmmm…Why would anyone have doubts?


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