Spain says savings banks must improve transparency

 

Spain's highly indebted savings banks must improve their solvency and transparency to gain the confidence of markets, its Economy Secretary Jose Manuel Campa said on Friday.

Spain's saving banks have been through a restructuring process to cut their number from 45 to 17 and allow them to open their books to private investment, but investors worry they may fail due to over exposure to the struggling property sector.

The savings banks will have to work hard to prove their solvency and attract private investment, Campa said.

"They must recapitalise and have an adequate capital structure to participate in the markets. They need to explain their business plan to generate credibility."

The new savings bank law has given the banks enough options to rebuild themselves without applying for further aid from the state-backed restructuring fund (FROB), the government has said.

Spain says savings banks must improve transparency The FROB has so far granted around 10 billion euros to the restructuring process of the savings banks though can be expanded to 99 billion euros if necessary.