Financial sector "solid," central bank insists after cover-up claim

21st February 2008, Comments 0 comments

The Spanish financial sector is "solid" and "solvent," the Bank of Spain reported Wednesday, breaking its silence over allegations that the country's lenders are in worse trouble than bankers, regulators and government officials are letting on.

21 February 2008

MADRID - The Spanish financial sector is "solid" and "solvent," the Bank of Spain reported Wednesday, breaking its silence over allegations that the country's lenders are in worse trouble than bankers, regulators and government officials are letting on.

"Spanish financial entities are in a solid position to withstand the current economic climate," Francisco Javier Aríztegui, the central bank's director general for supervision, said yesterday at a conference on risk management in Madrid. He pointed to "ample" liquidity, "high" profitability, and "comfortable" solvency levels as reasons why no one should doubt the health of the sector. He stressed that the fallout from the subprime mortgage crisis in the United States and the ensuing international credit crunch has had "little impact" on Spain.

His comments appeared to constitute the central bank's response to accusations from the opposition Popular Party Tuesday that the regulator had failed to defend itself from foreign press claims suggesting that Spanish banks are having problems. The claims stemmed from news that Spanish lenders turned to the European Central Bank for above-average amounts of credit in December, which the bank itself deemed normal.

[Copyright EL PAÍS / ANGELES ESPINOSA 2008]

Subject: Spanish news

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