Pearse Doherty
Ceist:38 Deputy Pearse Doherty asked the Minister for Finance if he will provide an update on discussions at a European level regarding the Spanish banking crisis. [25625/12]
Amharc ar fhreagraWednesday, 23 May 2012
Ceisteanna (39)
Freagraí scríofa
Finance Ministers are regularly updated on developments in Members States, including at the Eurogroup and Ecofin meetings. In this context, I would point out that the Spanish authorities are keeping their colleagues at EU level informed of developments. It is commonly acknowledged that the Spanish banking system as a whole remains vulnerable to market tensions given its exposure to problematic real estate and construction assets, the weak economic outlook and large refinancing needs. On the basis of their assessments, a number of rating agencies have recently downgraded the credit ratings of several Spanish banks.
It is fair to say that the Spanish authorities have taken a number of positive steps to address market concerns regarding the financial sector. For instance, an independent audit of banks will be undertaken in order to boost transparency and definitively address doubts about the valuation of bank assets. In addition, banks are being obliged to set aside additional capital to cover potential losses on the riskiest assets. While the Spanish authorities have taken a number of positive measures to address the situation it will take time to deliver the necessary results. Uncertainty is likely in the interim period, which may be reflected in elevated market tension.