|Chennai||Rs. 27580.00 (0.18%)|
|Mumbai||Rs. 28700.00 (0%)|
|Delhi||Rs. 27700.00 (0.73%)|
|Kolkata||Rs. 28270.00 (0%)|
|Kerala||Rs. 27050.00 (0.74%)|
|Bangalore||Rs. 27350.00 (1.11%)|
|Hyderabad||Rs. 27660.00 (1.21%)|
The European Commission on Wednesday approved a payment of euro 37 billion, or $48 billion, from the Euro zone bailout fund to four Spanish banks on the condition that they lay off thousands of employees and close offices as part of their restructuring.
Some of the biggest job cuts were expected to be made by Bankia, the giant lender whose collapse and request for euro 19 billion of additional capital last May forced Madrid a month later to negotiate a banking bailout of up to euro 100 billion.
The funds approved Wednesday are part of that negotiated amount and will be disbursed from the European Stability Mechanism, the bailout fund for the Euro zone.
Joaquín Almunia, the European Union antitrust commissioner, said the approval of the restructuring plans of the four banks — BFA/Bankia, NCG, Catalunya Banc and Banco de Valencia — was “a milestone.”
Although Madrid could tap into more of the funding to help other troubled banks stay afloat, the government has insisted that it would in any case not need the full amount.
Madrid has yet to draw a line under its banking crisis. The next step is expected in December, when it sets up a so-called bad bank to allow banks to transfer their most toxic property assets.
The valuation of these assets, however, has in itself proved a thorny issue because of the impact such valuations could have on other assets held by the banks.
Overall, Spain’s ailing banking industry could need as much as euro 59.3 billion in additional capital, according to an independent banking assessment published last September by Oliver Wyman, a consulting firm. And of the 14 banks assessed by Oliver Wyman, half are not in need of any emergency funds, including Santander, BBVA and Caixabank — the country’s three leading financial institutions.
© 2012 The New York Times News Service