Spain calls for immediate release of bank stress tests

29th June 2010, Comments 0 comments

Spanish Finance Minister Elena Salgado called on Tuesday for the immediate release of "stress tests" aimed at proving the ability of eurozone banks to sustain financial shocks.

Her comments came amid market concern over the health of Spanish banks, some of which have had trouble securing inter-bank funding recently.

"Spain wants (the tests) published as soon as possible," Salgado told Spanish radio Cadena Ser, adding that she would make such a proposal at meeting of EU finance ministers on July 13.

EU leaders agreed at a summit earlier this month to release the results of the stress tests in order to calm markets nervous over the state of the financial institutions.

Salgado also appealed to the European Central Bank to "be conscious of the needs of our financial system."

An article in Britain's Financial Times on Tuesday said Spanish banks were angry that the ECB is not renewing a one-year 442-billion-euro special liquidity scheme launched last year. The scheme expires on Thursday.

Spain's second-biggest bank, BBVA, declined to comment on the article.

A spokesman for its main rival, Banco Santander, said the group's president, Emilio Botin, had recently emphasised that the bank had "very comfortable" liquidity and "does not usually count on aid from the ECB."

Salgado also said that the Spanish economy would not slip back into recession this year.

"We have not changed our forecast that there will be no negative third quarter this year," she said.

Spain last month became the last of Europe's big economies to emerge from recession, with official data showing fragile growth of 0.1 percent in the first quarter.

The country went into recession at the end of 2008 as the global financial meltdown compounded a crisis in the Spanish property market, which had been a major driver for growth in the preceding years.

The recession sent the unemployment rate soaring to more than 20 percent in the first quarter.

© 2010 AFP

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