Top banker: Spain needs over 53 mln euros to slavage banks

Spain said Friday it needed 53.7 billion euros to recapitalize its financial sector and address widening confidence problem its economy was facing. An independent company assigned by the Spanish government to assess aid needed to revive Spanish banks had said the banks might need up to 59.3 billion euros "in worst scenario cases" and without considering recent reforms and mergers between banks, deputy central bank governor Fernando Restoy told a news conference. Restoy said 14 Spanish banks, or 90 percent of the financial system, underwent stress tests. Seven of them passed tests: Santander, BBVA, Caixabank, Sabadell, Kutxabank, Bankinter and Unicaja y Caja Espana-Duero. He added that seven other banks needed recapitalization aid, foremost Bankia which needed 24.7 billion euros. Restoy said nationalized banks needed 21.46 billion euros while the rest needed 7.5 billion. Restoy said restructuring the Spanish financial sector would enable it address future financial challenges and regain confidence of investors. He said the banks and financial institutions should provide their reform plans for the government to get the necessary bailout. Member countries of the eurozone approved, last June 8, to extend up to 100 billion euros to salvage Spain's financial sector in order to restore investors' confidence and boost financial stability in the eurozone. The International Monetary Fund (IMF) projects Spanish banks' needs at 40 billion euros. Spain approved three major structural reforms in its financial sector over the past nine months. Spain, a major eurozone member, also aims at saving more than 20 billion euros to cut the deficit to 4.5 percent of GDP by end of next year.