Spain to force banks to raise bad-loan provisions

Page last updated at 07:29 GMT, Wednesday, May 9, 2012 - 12:29 EST

AFP:

A protester holds a banner reading "Enough of the banking abuses" during a demonstration in front of Bankia in Madrid

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Spain's government on Friday will force banks to boost their financial cushion against risky property assets, an official said, as Madrid struggled to soothe international worries.

"There will be new provisions" against property-related assets demanded in a package of banking sector measures to be issued on Friday, an economy ministry spokeswoman said Wednesday, without giving further details.

The extra money set aside against risky loans and seized real estate linked to the distressed property sector could amount to 35 billion euros ($45 billion), said business daily Cinco Dias.

That figure comes in addition to the 53.8 billion euros in provisions already demanded in a reform announced in February.

Read the whole story: AFP