Spain bank troubles nag finance leaders, ministers

jueves 7 de junio de 2012 17:32 CEST

By Mette Fraende and Johan Ahlander

COPENHAGEN, June 7 (Reuters) - Growing fears for Spain's banks haunted international finance leaders at a conference on Thursday, prompting government ministers and a CEO to urge a quick bailout to stop the damage spreading through the European and global economy.

Speaking at the Institute of International Finance conference in Copenhagen, ministers stressed that the problems of the Spanish lenders reached far into Europe.

"We must find ways to deal with this fairly quickly because that is today the major threat to the world economy," Swedish Finance Minister Anders Borg told Reuters.

Urging the Spanish government to consider all options, Borg said: "What they need to do is to ensure that they have sufficient capital of their banks so that they do not pose a concern for all of Europe."

Spain, the euro zone's fourth biggest economy, has said its borrowing costs are becoming prohibitive and appealed to European partners to help its banks overcome the bad debt legacy of a burst property bubble.

"There is no doubt that the Spanish banks need support in one way or another, it can be capital from the government, loans, or both," Danske Bank Chief Executive Eivind Kolding told Reuters. "A solution needs to be found."

While Spain's direct government debt burden is smaller than others in the euro bloc, the needs of its banks and the debts racked up by its autonomous regions are driving it towards a bailout that would be far more costly than those rolled out for the much smaller Greek, Irish and Portuguese economies.

The co-dependence of euro sovereign debtors on banks that have been buying government bonds adds to the economic dangers.   Continuación...