Two independent audits of the Spanish banking system say it could need as much as 62 billion euros to recapitalise, though the euro zone has already set aside 100 billion to deal with it. Joel Flynn reports.
Spain could need as much as 62 billion euros to recapitalise its banks. That's according to two independent audits released on Thursday. Spain's three largest banks won't need any of the cash, but a group of smaller troubled banks will get the rescue funds, instead of being shut, according to the government. The deputy governor of the Bank of Spain, Fernando Restoy, said that markets should understand exactly why this money was required. (SOUNDBITE)(Spanish) DEPUTY BANK OF SPAIN GOVERNOR FERNANDO RESTOY, SAYING: "We are not talking about imminent capital needs for the institutions. We are not saying that somebody urgently needs so much capital to face its compromises at the moment. We are talking about the capital that we might need if we faced a scenario of extreme tension which is very far from happening here." The Spanish government said it would use the audit results to help formalise an aid request. The euro zone earlier this month promised 100 billion euros to help fund Spanish banks. Luis de Guindos, Spain's economy minister, said the audits were a huge step towards fixing the country's banking system. (SOUNDBITE) (Spanish) SPANISH ECONOMY MINISTER, LUIS DE GUINDOS, SAYING: "I think that the data will be very helpful to grasp what the real situation is and it will allow us to eliminate the uncertainties that exist over Spain's banking sector. From there, from there, we will see what the design of the whole process of the financial assistance could be. We have already started working with the Commission, the European Central Bank and the International Monetary Fund." Meanwhile European finance ministers met in Brussels to discuss how Spain will be lent the money. Many in the markets see the package as a mere prelude to a full programme for the Spanish state. Europe's fourth largest economy is now facing borrowing costs widely regarded as unsustainable. Joel Flynn, Reuters.