Spain approves third financial overhaul in less than a year
Spain's latest move to shore up its ailing financial sector was approved Wednesday by a wide margin in the Senate.
Madrid: Spain's latest move to shore up its ailing financial sector was approved Wednesday by a wide margin in the Senate.
The bill for the restructuring and resolution of troubled Spanish banks marks the third financial overhaul since Prime Minister Mariano Rajoy took office last Dec 21.
The Senate passed the legislation by a vote of 165-56 with six abstentions.
The bill, which arrived in the Senate via emergency procedure, meets the conditions of a euro-zone rescue package of up to 100 billion euros ($127 billion) - approved this summer - for Spain's ailing lenders.
Economy Minister Luis de Guindos estimated Wednesday that the capital shortfall of Spain's banking sector, adversely affected by the collapse of a long-building housing bubble, would eventually amount to less than 40 billion euros.
De Guindos offered that assessment in a speech Wednesday at Banco Santander's headquarters in Madrid, saying that with less than 4 percent of its gross domestic product Spain will have recapitalized banks shown in stress tests to be in need of assistance.
The financial sector overhaul, which received final approval Wednesday, includes the creation of a so-called "bad bank" to receive the impaired assets of entities receiving public support in their recapitalization efforts.
The legislation also would bolster protection for banks' minority shareholders, cap the salaries of top executives at banks receiving public assistance and raise financial institutions' capital requirements.