Sunday, 6 March 2011

Spain's battered savings banks race to find funds - Hurriyet Daily

Spain's ailing regional savings banks are scrambling to raise billions of euros of fresh funds to meet strict new capital requirements by a Thursday deadline.

The country's 17 savings banks, known as "cajas," are weighed down by loans that turned sour after the collapse of a housing bubble in 2008 and are at the heart of fears the country could need an Irish-style international rescue.

Last month the government approved stricter rules on the amount of core capital that banks must hold on their balance sheets. Under the new rules, savings banks must raise the proportion of core capital they hold to 8 percent of total assets from the current 6 percent, or to 10 percent if they are unlisted.

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