Spain's banks need less than predicted to clear debts

Spain's banks will need just 15 billion euros ($A20.69 billion) to clean up their balance sheets, the central bank said Thursday, rebuffing predictions by Moody's which sliced the country's' credit rating hours earlier.

The shortfall, which concerns a total of 12 banks, was less than the government's ceiling of 20 billion euros -- and well below the forecast by Moody's ratings agency of 40-50 billion euros. The Bank of Spain's report responded to tough government measures unveiled last month that require banks to raise their minimum levels of core capital in a bid to shore up confidence in financial institutions and the wider economy. 

Under the new regulations, the banks must raise the proportion of core capital they hold to 8.0 per cent of total assets from the current six per cent, or 10.0 per cent if they are unlisted. Those that have fallen short had to reveal by March 10 how much they need to raise to meet the new requirements.

"Overall, 12 banks must increase their capital, for an amount totalling 15.15 billion," the Bank of Spain said in a statement.

Source: Sydney Morning Herald