Spanish banks need at least 70 bln euros

The rating agency Moody\'s Tuesday said that Spanish banks will need between 70 and 105 billion euros (135 billion U.S. dollars), a figure that is higher than the one provided by Oliver Wyman last Friday. The agency said that Spanish banks need this money to be recapitalized and face potential losses. Moreover, Moody\'s said that the figure provided by Oliver Wyman, 53.7 billion eurostaking into account mergers, may be insufficient to get investors confidence back. The agency talks about the possibility that the markets do not trust these tests, which can make that the bank recapitalization causes unexpected consequences. However, the agency is positive about the process of bank recapitalization. It considers that the process will help improve the financial entities solvency and therefore increase confidence in the Spanish banking sector. This took place three days after the Ministry of Economy announced recapitalization needs of the Spanish banking system, 59.3 billion euros without taking into accountmergers that are taking place. Oliver Wyman analyzed 14 banks and seven of them did not need additional capital, which means that 62 percent of the Spanish banking system does not need recapitalization. On the other hand, Moody\'s is expected to reveal very soon its rating on the Spanish sovereign debt, which is very close to junk bond status at the moment.