Spain planning possible bank failures: report

20th March 2009, Comments 0 comments

A rescue plan for the banking sector is being prepared by the Spanish government, reports a newspaper.

MADRID – Spain's government is preparing a rescue plan for the banking sector that would see the state taking a stake in some banks while allowing others to go bust, the ABC daily reported on Thursday.

Officials at the economy ministry, the cabinet and the central banks were not available to comment on the report since Thursday is a holiday in Spain.

ABC said the government was planning to divide banks into three groups: those that did not need help, those that could receive some government assistance and a third for banks that the government would allow to fail.

Spain's two top banks Santander and BBVA would be in the first group.
The Spanish banking sector has so far been spared much of the turmoil that has hit banks in other parts of the world. No bank has had to be recapitalised and state aid has been limited to loan guarantees or some asset purchases.

AFP / Expatica

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