Spain’s property woes and economic downturn finally may be
catching up with the country’s two largest banks, Banco Santander and
BBVA, the WSJ reports. The big banks have remained profitable throughout
the financial crisis despite the bursting of the housing bubble in
Spain, high unemployment and other problems, the paper notes. One
reason: the government’s strict requirements for Spanish banks to
maintain high reserves against bad loans, in part a response to a
previous property downturn in the 1990s. But now there is concern
whether these cushions can withstand the impact of an increase in
nonperforming loans, the WSJ says.
Source:sharpnews
