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De Guindos to Meet Almunia as Spain Devises New Bank Plan

Source: Bloomberg - Wed 2th May 2012
De Guindos to Meet Almunia as Spain Devises New Bank Plan

Spanish Economy Minister Luis de Guindos will meet European Union Competition Commissioner Joaquin Almunia tomorrow as the country devises steps to clean up its banking industry.

De Guindos and Almunia will meet in Brussels, said an Economy Ministry spokeswoman who asked not to be named in line with policy. She declined to give details on what they will discuss. No one was available at Almunia’s office when contacted by Bloomberg News today, which is a holiday in much of Europe.

Less than three months after tightening legislation to force lenders to recognize deeper real-estate losses, Spain is seeking new ways to convince investors that bank losses won’t overburden public finances. De Guindos said last week the government will allow lenders to offload real-estate assets into separate asset-management companies in order to free up capital and allow them to concentrate on their ongoing businesses.

Banks will have to make provisions for the assets before transferring them, and in the case of land those writedowns amount to 80%, Guindos said on April 26. Guindos is also expecting more bank mergers and “efforts by the banks to restructure and clean up” in the coming days, he said yesterday.