European Council Declares Spanish Banks Need no Aid

Spain’s banks do not at present need further European aid, according to a document prepared by the European Commission and the European Central Bank and seen by Reuters on Friday.

Spanish lenders, hit hard by a five year on-off recession and burst property bubble, have received financial aid from Europe of 41.3 billion euros of a potential line of up to 100 billion euros.

“There is at present no reason to foresee further program disbursements,” the report said. The aid was used for the recapitalization of state-aided banks and a capital injection into a so-called bad bank that took on bad loans and devalued property assets from the financial system.

The report, which also involved experts from the International Monitory Fund as an independent monitor, said ensuring bank profitability represents a major challenge given low interest rates and rising bad debts.

via Reuters

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