The IMF still sees ‘vulnerable’ to the Spanish savings banks
Author: Hector
The International Monetary Fund (IMF) has warned of “vulnerability” of Spanish savings banks and has called on the authorities to strengthen the measures taken so far, although he recognizes that reform of the sector is “well on track “.
In the latest edition of ‘Report on the Global Financial Stability’, IMF stresses the “vulnerability” of Spanish savings banks and Portuguese banks by their holdings of bonds and their exposure to real estate as well as the high cost wholesale funding.
However, during the press conference presenting the report, José Viñals, head of the Monetary and Capital Markets IMF stressed that reform of the savings banks in Spain is a process “on track” to be completed.
In particular, Viñals noted that in the case of CAM, this box has “the opportunity to go to Bank Restructuring Fund (FROB)” in the case of not obtaining financing through private investors or through a merger with another entity, which underscored that the issue “is not a surprise, but it is a possibility already provided.”
Besides alerting the problems of the Spanish and Portuguese authorities, the IMF also notes that the Austrian banks, the British and Americans have a higher credit-related losses, but are supported in relative profitability. German banks said that, by contrast, have a low income who have been fed by low levels of capital in the case of Land and credit unions.
It adds that low levels of capital make some German banks, as well as some weak agencies of Italy, Portugal and Spain, are “vulnerable” to new “shocks” in the economy.