IMF: Spain's banks need at least 40 b. euros

By REUTERS
June 9, 2012 04:51

 
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WASHINGTON - Spain needs about 40 billion euros in extra capital injected into several banks to allow them to withstand severe economic conditions, the International Monetary Fund said on Friday.

The IMF said its "stress test" does not include extra capital that it recommends Spain needs as a buffer to cover restructuring costs and loan losses. An IMF official said such a buffer usually would be 1.5 to two times larger to convince markets that Spain has a credible cushion to handle shocks.

In Spain's case, that would bring the size of capital required to stabilize its banking system to as much as 80 billion euros, although the IMF did not specify a figure in its Financial Sector Assessment Program report released on Friday.

Spain is expected to ask the euro zone for help with recapitalizing its banks this weekend, sources in Brussels and Berlin told Reuters on Friday, becoming the fourth country to seek assistance since Europe's debt crisis began.

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