Spain's banks need more than 50 billion

Spain’s banks need to be recapitalized to the tune of more than 50 billion euros, according to an independent report released on Friday. As high as this figure may sound, it has led to a sense of relief in some circles. The so-called "stress tests" conducted by the consulting firm Oliver Wyman found that Spain's banks needed at least 53.7 billion euros ($69,4 billion) in recapitalization - or as much as 59.3 billion - depending on whether ongoing mergers are taken into account. The bank in the worst shape is Bankia, which needs 24,7 billion euros, followed by Catalunya Caixa, which needs 10.8 billion, and NCG Banco (7.2 billion). Bankia, which is the product of a seven-way merger of troubled regional banks, was taken over by the government earlier in the year. On a more positive note, though, more than 60 percent of Spain's lenders needed no extra capital. Among them are the leading lenders Santander and BBVA. "The results confirm that the Spanish banking sector is mostly solvent and viable," Spain's Economy Ministry said in a statement shortly after the Bank of Spain announced the results of the stress tests. The managing director of the International Monetary Fund welcomed the news of the audits. "I welcome the completion of the Spanish banking sector valuation announced today by the Spanish authorities," Christine Lagarde said in a statement. "Public funding of the banks' actual capital needs, which are expected to be lower than the amounts identified in the stress tests, can be financed comfortably under the recapitalization program supported by Spain's European partners," she added. The stress tests were a precondition for Spanish banks receiving European assistance to restore their liquidity. Eurozone countries have pledged to make as much as 100 billion euros available for this purpose.