The BBVA and Santander – two leading banks of Spain, need to raise a sum of £9 Billion according to the City analysis report. Just a few days ago, these two banks were declared as one of the best banks in Europe, by the governor of the Bank of Spain.
Later on, BBVA and Santander were exposed to a stress test by the Bank of Spain to determine the level of their financial endurance. However, the findings of the Bank of Spain were challenged by Mr. Joseph Dickerson of Execution Noble.
Mr. Dickerson conducted a stress balance sheet test that was intended to determine the severe outcomes within its scope of possibilities. On the basis of his test results, he said that the markets still have doubts about BBVA and Santander, despite of being declared as top banks by the Bank of Spain.
He said, that the central bank is going to sought out the assurance that both banks have adequate capital, for what would seem to be the most reasonable scenario, but also for the complex growth scenarios in the future.
Mr. Dickerson continued, by saying the “Most Reasonable” seems to beg the question as to whether the concerned banking system is being put to adverse stress scenarios – provided that the unemployment, inflationary and deflationary forces, the effects of domestic property bust and the international buyers strike, are considered too.
According to Mr. Dickerson’s stress test, each bank needs £9 Billion, while assuming conditions such as the 10pc write off in the value of each bank’s holdings of Spanish Government debt. For now, spokesmen from both BBVA and Santander have refused to give any comments regarding Mr. Dickerson’s stress test and pointed out that the banks have carried their own stress tests.