Spain will restructure its bank regulations to permit the partial nationalization of its ailing savings banks and allow the injection of fresh capital into them, The Wall Street Journal reports. The move will let Spain’s state-backed fund for orderly bank restructuring, FROB, buy direct equity stakes in the cajas for up to five years.
The FROB, which has put €11.6 billion in loans to help cajas pay for restructuring, may increase its capacity to a total of €99 billion through new debt issues. Nearly 40 regional banks, out of a total of 45, are now in the process of merging or forming operating alliances as part of a restructuring led by the Bank of Spain, adds AFP.
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