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Spain's Cajas hiding Debt
The Spanish savings banks will have to redo the stress test after the European Banking Authority (EBA) on Wednesday announced the postponement of the evidence that the entities referred some data too optimistic. According to industry sources, the Bank of Spain will require greater hardness with exposure to real estate, which can cause suspension testing several entities, which will be published in the second week of July.
As anticipated the Confidential April, the Bank of Spain had sought ways that virtually the entire Spanish financial sector stress tests passed, and one of his victories was the inclusion in computing the capital of the money pledged by the FROB although not ship until September.
However, the EBA has not swallowed the figures sent from Spain and from other European countries. According to a report yesterday by the Wall Street Journal, the reason for the delay is that banks have sent some data too optimistic, which would detract from the credibility of the testing effort, as happened last year.
Therefore, this newly created banking authority has required national central banks to tighten the conditions of the test, described as “unrealistic” in light of the data received. His intention is to publish the results in the second week of July, according to sources, although further delays can not be excluded.
Interestingly, the Spanish banks had complained of the hardness of the evidence excluded from the capital because concepts such as convertibles and prevent you from upgrading the expected benefits for years to come.
Raising the expected loss
Officially, the Bank of Spain has not communicated to the institutions the new requirements, but the sources say, beyond clarification or further segmentation of the information, the supervisor seeks to raise the expected loss on real estate exposure (credit promoter and awarded blocks). This means that the industry takes that in case of crisis, stress tests are to pose adverse scenarios, the losses will be greater than originally estimated.
This will surely make some entities suspension of the test. ”The Bank of Spain’s interest that some do not pass as a matter of credibility, no one would believe the evidence if everyone passes them and would have no validity, as last year”, added the sources.
This hardening is not applied only to banks but also banks, but they are the first ones to suffer most and who are at risk of suspending the test in this new scenario.You will also need to be extended to other European banks, but its real estate exposure is negligible compared to the Spanish. In that case, the main problem is the debt portfolio of peripheral countries, which incidentally will not submit to testing.
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dude, you should work on your language!
Now that Europe is safe, USA next....
I would say instead the Spain in Pain is plainly in the Main
I'm going with the pain in Spain is mainly very plain.
Have they auctioned off their Plains to anyone yet?
After the Greece jubilation, the markets will attack Italy, and it will be papered over with much jubilation. Then it will attack Spain, and it will be papered over with much jubilation. Then it will attack Japan, and it will be papered over with much jubilation. Then it will attack....
Kinda hard to attack Japan when most of their debt is domestic.
Not impossible but difficult nonetheless, couple that with fanatic nationalism, its probably more trouble than its worth, better off going after the Chinese, the snakes will eat each other for a profit.
Agreed. And why I love this site. No one misses a thing. Although I get the feeling that all 195 countries could enter this bizarre parade. A parade that we'll be witnessing for a long time. And I hate parades.
Spanish bulls vs Italian bunga-bungas.... wonder who kicks the can further.
wheee! this is exciting! Who's first? Spain or Italy. Italy or Spain?
Perhaps a photo finish?