Spain to release bank audits after austerity cuts
Friday 28 September 2012
Spain is set to reveal how much trouble its banking system is in when it releases the results of audits of 14 lenders today.
The stress tests' findings will help the country decide how much money it will tap from a 100 billion euro (£81 billion) European loan
facility to prop up its financial sector.
Spain's largest international banks are not expected to need funding. However, many of the country's regional lenders, which are struggling with assets that went toxic after a crash in Spain's property market, are expected to need help.
Rating agency Moody's Investor Services is also expected to issue a report today that some analysts believe will reduce Spanish bonds to junk status.
Spanish stocks were down 0.9 per cent on the country's benchmark stock index early this afternoon. The interest rate, or yield, on the nation's benchmark 10-year bond stood at 6 per cent.
Today's audit results, expected in the evening after European markets close, will come a day after Spain outlined plans to cut spending and raise taxes. The government's 2013 budget was drawn up to convince financial markets it is on track to reduce its bloated deficit. Finance Minister Cristobal Montoro said yesterday Spain's draft budget for 2013 would cut overall spending by 40 billion euro.
Many analysts believe yesterday's budget is part of preparations for another financial lifeline to help the country reduce its high borrowing costs.
Spain is under pressure to take up the European Central on its offer to buy unlimited amounts of government bonds to help lower borrowing costs for countries struggling to manage their debts. Such large-scale purchases of short-term government bonds would drive up their price and push down their interest rate and take some pressure off of financially stressed governments such as Spain.
World Beard and Moustache Championships held last week
- 1 'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
- 2 Number of global billionaires has doubled since the financial crisis
- 3 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 4 Of course, teenage girls need role models – but not like beauty vlogger Zoella
- 5 North Korean officials 'publicly executed for watching South Korean soap operas'
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Number of global billionaires has doubled since the financial crisis
Elizabeth Norment dead: House of Cards actress honoured by Kevin Spacey after she dies aged 61
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
Nigel Farage and Frankie Boyle clash over Andrew Lawrence's 'Mock the Week' criticism
£90 - £130 per day: Randstad Education Leicester: Primary School Supply Teache...
£21000 - £35000 per day: Randstad Education Chelmsford: Maths Teacher - Saffro...
£18000 - £20400 per annum + Accommodation, Flights, Medical Cover: Randstad Ed...
£21000 - £35000 per annum: Randstad Education Chelmsford: Geography Teacher - ...