Barclays to go for Spanish bank?

31 May 2011

Barclays could be about to offer a multi-billion pound rescue deal for a struggling regional Spanish bank.

Talks have been held between the lender's chief executive Bob Diamond and the Spanish prime minister regarding the situation.

Part of the discussion centred on whether Barclays would be granted state guarantees from losses incurred on any historic loans, should such a deal take place.

Although the talks did not focus on one individual bank, they allowed Barclays to consider its opportunities in the market.

The institution already has a presence in Spain, but analysts have suggested it either attempts to increase its business size in the country or leave it for good.

Regional banks in Spain had earlier been told by the nation's government that they need to raise €20 billion ($29 billion) in order to refinance themselves.

Outgoing BNP Paribas chairman Michel Pebereau recently told the Financial Times that banks in the UK should not be over-regulated, as this could lead to London risking its status as a world leader.

By Tony Aynsley

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