Spanish Business News

MADRID (MarketWatch) -- Moody's Investors Service on Monday said Spain's banks could need up to €50 billion in recapitalization funds. That's higher than the government's own estimate that a maximum of €20 billion in recapitalization funds is needed and Moody's prior estimate of €17 billion that it calculated at end-2010. Moody's said it "remains cautious" on the government's plan for recapitalization aimed at restoring market confidence. "We think that confidence in Spain's savings banks will only be completely restored once the problematic exposures are translated into losses and the adequacy of bank capital is robustly tested," said Alberto Postigo, Moody's senior analyst, in an extract from Moody's Weekly Credit Outlook. Moody's said much of the recapitalization would be centered in the savings-bank sector. The Bank of Spain, which has been working with the government to clean up the savings banks, will announce how much additional capital banks need on March 10.

Source: MarketWatch.com