Spain fights ECB loan plan

Marion Dakers
SPANISH banks are bracing themselves today as the European Central Bank prepares to call back €442bn (£358bn) of one-year loans.

Senior bankers in the country have described the central bank’s plans to end long-term loans as “absurd.”

While the ECB will today offer unlimited loans for three months to lessen the blow to banks across Europe, the Spanish finance minister has warned the repayment schemes ignore the liquidity needs of the country’s banking system.

“The ECB says it doesn’t like governments telling it what to do. I simply say I hope that on this occasion, as in others, the ECB will be aware of the needs of the Spanish financial system,” Elena Salgado said on Spanish radio yesterday.

Banks in Spain and other countries have lobbied the ECB to ease the comedown from the expiry of the one-year-old loans on Thursday.

The ECB remains keen to cushion the banks as it draws its emergency monetary policy to a close.
“There are some banks that are in a less good situation that might eventually suffer, but we will make sure that there are no problems and everything goes OK,” Christian Noyer, who heads the Bank of France, told Europe 1 radio.