The ECB Gives Spanish Banks Between 6 & 9 Months to Meet Working Capital Needs

30/04/2014 – Cinco Dias

After knowing the results of the Asset Quality Review test or the endurance test basic scenario measured with the core equity intruments (Common Equity Tier 1) ensuring the capacity of loss absorption, the European Central Bank informed Spanish banks that they shall raise the amount they are still missing.

The results will be made public in October along with the endurance test outcome. The latter examination will be conducted by the ECB, the European Banking Authority and the European Systemic Risk Board with taking into consideration an adverse scenario occurance.

The ECB expects the banks to raise the missing capital unearthed during the AQR and in the basic scenario of the endurance test within six months. For finding the money for the adverse scenario they have a 9 month period.

In the capital scheme the entities can include their withheld profits, minor bonus payments, new ordinary share issues and selected asset sales which go in line with market prices.

Nearly 6.000 supervisors and auditors are working on the quality review and the endurance test. Warrant, provision and exposition revisions are to end in summer.



Original article: Cinco Días

Translation: AURA REE