Bank of Spain to release banking 'stress tests' results
The Bank of Spain said it intends to publish "stress tests" on the ability of its banks to sustain sudden financial shocks so as to calm market nerves about the strength of its financial institutions.
The central bank "plans to make public the results of these stress tests so that the market understands the situation perfectly," Bank of Spain governor Miguel Fernandez Ordonez said on Wednesday.
Spain's leading daily El Pais described the decision as "unprecedented" in the euro zone.
"The Bank of Spain has already carried out stress tests to verify that all financial institutions -- banks, savings banks and cooperatives -- have sufficient capital put aside, not only to traverse scenarios which today appear more reasonable but also to deal with complicated growth scenarios in the future."
Market sentiment has been affected by various rumours concerning possible strains within the Spanish banking system and suggestions that Spain might need help amounting to 200-250 billion euros (246-307 billion dollars) from the European Union.
EU and Spanish officials have strongly denied such suggestions.
The financial markets are awaiting clarification on these concerns from an EU summit in Brussels.
Spain 45 regional savings, many of which are controlled by regional politicians, have been badly exposed to bad debt following the collapse of the property sector at the end of 2008.
The government has encouraged their consolidation in order to maintain liquidity.
© 2010 AFP