Spanish banks 'will have to raise more provisions for property losses'
Last Updated on Saturday, 12 May 2012 23:12 Saturday, 12 May 2012 23:06
Banks in Spain will need to raise more funds to protect themselves against potential property losses.
A spokeswoman for the ministry of economy and finance said new provisions regarding real estate in Spain will be introduced to ensure financial institutions are protected should their assets fail.
The representative did not provide any further information regarding the move, but it is believed the distressed property fund could total €35 billion (£28 billion)
Fresh concerns regarding the health of the Spanish banking sector have raised more worries over the eurozone financial crisis and shares in some of the country's biggest lenders, including Banco Santander, BBVA and Bankia have fallen
The government has taken control of Bankia in a bid to reassure the financial markets it is able to restore stability to the banking sector and chairman of the company Rodrigo Rato has stepped down from his position.
According to Reuters, the move gives the government a 45 per cent indirect stake in the bank.