Nomura Securities on Spanish Banks: Will EUR 100 billion Be Enough?
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Nomura Securities on Spanish Banks: Will EUR 100 billion Be Enough?
Analyst, Daragh Quinn, said, "Following a request from Spain, EU authorities are ready to provide up to EUR 100bn to the FROB (the Spanish bank restructuring fund). In our recent research, we estimated a capital need of c. EUR 60bn. This compares with c. EUR 60bn to EUR 90bn estimates from other key market participants. The IMF has recently estimated up to EUR 37bn to EUR 45bn, based on using a minimum 7.0% or 8.0% core capital level in a stressed environment. However, to comprehensively restore confidence, authorities could need to establish a more conservative core capital ratio minimum. It is possible that given ongoing events in Greece, combined with the economic challenge facing Spain, Spanish funding costs could continue to remain under pressure."
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Analyst, Daragh Quinn, said, "Following a request from Spain, EU authorities are ready to provide up to EUR 100bn to the FROB (the Spanish bank restructuring fund). In our recent research, we estimated a capital need of c. EUR 60bn. This compares with c. EUR 60bn to EUR 90bn estimates from other key market participants. The IMF has recently estimated up to EUR 37bn to EUR 45bn, based on using a minimum 7.0% or 8.0% core capital level in a stressed environment. However, to comprehensively restore confidence, authorities could need to establish a more conservative core capital ratio minimum. It is possible that given ongoing events in Greece, combined with the economic challenge facing Spain, Spanish funding costs could continue to remain under pressure."
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