Spain: ECB steps into banking sector reform
16 May 2012
"The ECB will carry out an audit of the Spanish banking sector," Cinco Dias reports. The European Central Bank decided to "cooperate with the government" in the reform of the Spanish banking system, especially concerning the valuation of assets and the creation of a "bad bank" charged with liquidating toxic real estate assets. This "unprecedented decision" comes a month after the second reform of the banking sector and in the midst of a financial storm in Spain caused by doubts about whether Greece will remain in the euro zone. The business daily adds -
The Government needs to accept the truth that ... neither Europe nor the international markets trust Spanish banks, and put measures in place to support them.
The ECB audit, which will be completed in two months, has already reached its first conclusion, says the newspaper: it reflects the "deep mistrust of the role played by the Bank of Spain" in taking back the management of the banking sector reforms. However, it adds -
[In terms of] convincing institutions and investors of the seriousness of Spain’s efforts to clean up its act and ensure the solvency of its banking system, ECB cooperation may become a valuable asset rather than a constraint.