Tuesday, May 15, 2012

Spanish banks will be required to boost provisions by €30 billion for real estate loans

Latest update from Spain Economy Minister, Spain announced another round of financial sector reforms Friday as the government seeks to restore confidence in banks hurt by the housing bust. Spanish banks will be required to boost provisions by €30 billion for real estate loans previously considered "non-problematic," Economy Minister Luis de Guindos told reporters. Is it new sub prime mortgage made by Spain economic??? let see...

The measures are in addition to rules issued last February, which required the banks to set aside about €50 billion for "problematic" real estate loans that were non-performing., Madrid also announced plans to hire two independent auditors to assess the value of bank real estate assets. Banks will be forced to "relocate" foreclosed real estate assets into an independently managed company before Dec. 31, according to documents posted on the Spanish government's website.

On previously news,  Spain has already undertaken several attempts to clean up the financial sector under previous administrations. But many analysts say it will take hundreds of billions of euros to fix the problem once and for all. That will prove challenging because the Spanish government has already warned that its budget deficit will be larger than expected this year.

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