IMF: Major Spanish banks have enough capital

26 April 2012

IMF: Major Spanish banks have enough capital

Spain's foremost banks are in a strong enough position to resist any pressure exerted on them by more problems in the eurozone.

That is according to the International Monetary Fund's (IMF) latest Financial Sector Assessment of lenders in the embattled Iberian nation, which has noted its largest financiers should be able to cope with another downturn.

In this report, the IMF revealed the results of stress tests on Spanish banks indicated this is the case for around 90 per cent of these firms.

"The largest banks appear sufficiently capitalised and have strong profitability to withstand a further deterioration of economic conditions," the body noted.

However, the IMF went on to warn that vulnerabilities remain in smaller Spanish banks, meaning policymakers need to draw up a strategy that could "quickly and adequately" help them should the need arise.

This comes after Swedish finance minister Anders Borg told the Peterson Institute for International Economics that problems in the Spanish banking system could undermine the entire global recovery.

By Claire Archer

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