Spain finishes recapitalizing savings banks

The process of recapitalizing the Spanish financial system has cost the country a total of 7,551 million euros, according to figures released by the Bank of Spain on Friday. The money was spent through the Fondo de Restructuracion Bancaria Ordinaria (FROB) and FROB now controls three Spanish banks, with 100 percent of the capital of Unimm, 93 percent of NovaCaixa Galicia and 90 percent of CatalunyaCaixa. "The process was completed today, on September 30," said Governor of the Bank of Spain Miguel Angel Fernandez Ordonez. "We have completed the process in the calendar that had been required and all of the banks fulfil the demanded level," he added. There are in fact two exceptions to this with the banks Marenostrum and Liberbank having been granted another 25 days to acquire more capital through private investors. As well as the public funds, the Spanish banking sector has also been able to attract private funding to the value of 5,838 million euros in order to reach the levels of capital demanded of them, meaning that the total cost of restructuring the sector is 13,389 million euros, slightly less than the original estimates of 15,152 million euros. This is mainly due to the fact that Bankia and Banca Civica have been floated on the stock exchange, reducing their need for capital. Ordonoz was pleased with the work that has been carried out in what he described as "the worst moment in the financial markets in the last 70 years," he added that the next priority was to resolve problems of sovereign debt, as well as viewing positively Germany's decision to approve the amplification of the European rescue fund. Spain's government spokesman Jose Blanco also valued the restructuring of the savings banks at his weekly press conference. "the financial sector is more solvent, more efficient and more transparent and we are going to recover the flow of credit towards the economy, to companies and to families."