Spanish Business News

BRUSSELS—Spanish Finance Minister Elena Salgado said Tuesday the government expects to approve legislation on Friday designed to speed up the overhaul of the country's ailing savings banks, known as cajas.

The legislation is expected to provide key details on how the government proposes to shore up the solvency ratios of these unlisted banks, which have born the brunt of the collapse of the Spanish housing boom.

Under intense pressure from international investors, the government said at the end of January it would force all financial institutions to have core capital ratios of at least 8% and threatened to partially nationalize those that fall short.

Ms. Salgado also said she expects inflation to fall in the coming months.

Spanish consumer-price inflation accelerated in January to its highest level in more than two years as the result of an increase in government-regulated electricity prices as well as high oil prices, Spain's National Statistics Institute, or INE, said in a statement Tuesday.

The INE said its consumer-price index rose at a 3.3% annual rate in January, up from 3% in December. It said January CPI fell by a 0.7% monthly rate. "What we expect for the next months [is] that the overall CPI will be falling," Ms. Salgado said Tuesday in Brussels.

Source: Wall Street Journal