Bank of Spain Would Ward Regular Banks

Bank of Spain

The Spanish government is preparing a decree which will allow the Bank of Spain to place under guardianship the banks in difficulty, before reselling in doubt about their viability.

This decree, still subject to change, is expected to be approved by the government in the Cabinet until next week.

It is estimated that this document will allow the regulator to intervene a bank that is judged as “not viable” or is “likely” that it will be in “near future”.

The euro zone in June granted a credit line to Spain for a maximum of 100,000 million euros to recapitalize troubled banks about their exposure to real estate bubble burst. In return, the country has pledged to reform the financial sector, in particular to strengthen supervision.

(BG)