The Spanish banks are going to need additional funds amounting to €57 billion in order to combat expected losses which are expected to exceed €107 billion, this according to highly respected credit rating group, Moody’s.
They view the assets held by Spanish banks as being in a continuing decline, which has not yet reached the end of the line, meaning that their assets will continue to lose value, not just for the next quarter, but perhaps several more.
This has resulted in Moody’s decision to keep the Spanish banks credit score in a negative bracket. Moody’s is also concerned that the economy of the country should still be on alert, and that many companies will fail to grow, and others will continue to deteriorate, which will have a knock-on effect of reducing the value of the banks secured assets.
On an even more sombre note, Moody’s says that if there is not a significant change in the decline of the National economy, the banks could face the need to find even more cash as their assets could deteriorate to a massive €225 billion, or more.