Spanish Bank failures were in the groups which form Caixa Catalunya, Tarragona and Manresa, Caixa Sabadell, Terrassa and Manileu, Caja Duero y España and the Banco Cívica which holds the Caja Navarra, Caja Burgos and Caja Canarias. Finally CajaSur.

Five Spanish Cajas savings banks have failed the European stress tests on banks, and will need 2.043 billion € between them to put their accounts into order. The test was designed to see if the banks would survive another credit crisis.

The Spanish failures were in the groups which form Caixa Catalunya, Tarragona and Manresa, Caixa Sabadell, Terrassa and Manileu, Caja Duero y España and the Banco Cívica which holds the Caja Navarra, Caja Burgos and Caja Canarias. Finally CajaSur.
All the Spanish conventional banks passed the test, with the Banca March emerging as the most solvent.

Also to fail the test were the German Hypo Real Estate and the Greek Atebank, but soon after the publication of the results commentators were asking whether the stress tests were tough enough with their solvency rating of 6%. The rating for Spain’s largest bank, Santander, came out at 10%, the BBVA at 9.3%, and Banco Sabadell at 7.2%, the Banco Popular at 7%, Bankinter at 6.8%, Banco Guipizcoano at 6.1% and Banco Pastor on 6%.

It should be noted that Spain presented the results from all its financial system, while the rest of the EU only analysed 50% of the assets in the financial system. The test in Spain contemplated a 55% fall in the value of real estate prices for offices, and 23% for flats, while other countries applied criteria which were far less severe. In Italy, for example, they contemplated a mere 2% fall in the value of real estate prices across the board.

That point was picked up by Elena Salgado, Minister for Tax and the Economy, who said the poor results for the Spanish banks were the result of Spain being more transparent. She said the financial reforms would continue here where necessary.

The Bank of Spain said that it had now been demonstrated that the Spanish financial system is solid. ‘We have subjected the entire banking system to tests of maximum tension in scenarios which are more than improbably for their harshness’.

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