Spanish banks must implement fundamental structural reforms in order to withstand further stress tests and to get enough money for recapitalization (the cost is around €60 bn). The audit conducted by Oliver Wyman will show whether the Spanish banking system will receive financial support. In summer, Spain made a request for a €100 loan. Up to €62 was planned to spend on the banking system bailout.
Oliver Wyman inspected 14 Spanish banks to find out that 7 out of 14 banks failed the stress test. For reference, stress tests are conducted to determine potential losses in various force-majeure scenarios.
On September 27th, the Spanish government finally presented the required package of reforms including spending cuts and other austerity measures. The 2013 budget approved by the Spanish government is expected to eliminate the decline in business activity and to fulfill all the obligations in order to receive financial support for the EU. The Spanish authorities hope that the approved plan will turn 2013 into the last year of recession.
