Spanish banks 'will need bailout'

18 April 2012

Banks in Spain are likely to have to resort to an external bailout in the near future due to the high level of pressure they are under during the monetary crisis.

That is according to Carsten Brzeski, senior economist at ING in Brussels, who has told Reuters it is beginning to look like a matter of when, not if, financiers in the embattled Iberian nation will need assistance.

Mariano Rajoy, Spain's prime minister, has regularly insisted that the country does not require international support but, earlier this week, speculation mounted that a bailout will be unavoidable as yields on its ten-year bonds rose above six per cent.

As a result, Mr Brzeski - along with several other analysts - feel banks based in the state will have little choice to seek outside help.

"They're going to need European Financial Stability Facility money to recapitalize the banking sector. I would not be surprised if [banks] have to get some kind of European support," he noted.

By Claire Archer

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