MercoPress. South Atlantic News Agency

Spain banks “strong and solvent”, no need for rescue plan

Santander CEO Emilio Botin

Spanish banks are strong and have solvency and do not need the government to take stakes in them, said Emilio Botin, the chairman of Spain's largest bank Santander.

Speaking at a financial conference, Botin said: "the Spanish government has already approved a series of measures in line with the Euro group's agreement last weekend". "And in my opinion, the government does not need to take stakes in Spanish banks, as has happened in other countries, given their strength and solvency" added Botin. Last week, the Spanish government announced various measures aimed at bolstering the domestic banking sector, including guaranteeing new bank debt until 2009 and the setting up of a fund for an initial 30 billion Euros to buy up assets from the banks. Guarantees for depositors were also increased. The steep downturn in Spain's property sector, coupled with the liquidity drought, has raised concerns about some of the small- to mid-sized Spanish banks' capitalisation levels and the future need for consolidation in the sector. Spanish Prime Minister Jose Luis Rodriguez Zapatero admitted this week that bank mergers are likely in Spain and other European countries and described the recent measures as "preventive". "The Bank of Spain (central bank), our regulator and supervisor has done an excellent job, as has been recognized internationally", underlined Botin. Santander is Spain's leading bank and is in negotiations to take over three banks in difficulties, two in UK and one in the US.