Spain confident its banks will pass stress tests

April 10, 2011 | 08:30

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Spain will submit all its banks and savings banks to stress tests at a European-recognised level, its finance minister said on Saturday, expressing confidence of a positive result.

"We have decided to analyse 100 per cent of our system of savings banks and banks," Elena Salgado told journalists on arrival for the second day of a European finance ministers' meeting in Godollo, Hungary.

"I think that with the measures we are taking to recapitalise the (financial) system, they (the banks) will pass the stress tests," she said.

The minister said the tests would be conducted in "total transparency", adding: "I think the markets will be very appreciative".

The European Banking Authority announced Friday it would carry out stress tests on 90 European banks and apply tougher criteria amid fresh concerns in the eurozone after Portugal said it needed a bailout.

Spain is by far the country best represented on the list, with 24 of its institutions named.

Spain's savings banks, often small and regional enterprises, are considered a weak point in the country's financial system.

But Madrid, which has enacted stringent budget cuts, and labour, pension and banking reforms so as to regain market confidence, is determined not to be the next eurozone domino to topple.

It is seeking to distance itself from the debt woes of its neighbour and close economic partner, Portugal, the latest after Greece and Ireland to require a European bailout.

AFP

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