Weekend Economists Go Out with a Boom August 24-26, 2012

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14. Spain delays bank reform Bill for further EU analysis

http://www.irishtimes.com/newspaper/finance/2012/0825/1224322963063.html

THE EUROPEAN Commission has asked Spain to delay unveiling a banking reform by a week to allow it study the measures in more detail, the government said yesterday.

The conservative administration of Mariano Rajoy had been expected to announce the approval of several changes to the country’s struggling financial system after yesterday’s cabinet meeting. However, deputy prime minister Soraya Sáenz de Santamaría said the commission wanted to analyse the reform further before its presentation on August 31st. “There aren’t any sticking points; we’re simply working on it together,” she said.

The Bill is expected to give the Fund for Orderly Bank Restructuring and the Bank of Spain more powers to intervene in and restructure underperforming lenders to prevent further collapses in the sector.

In May, Spain’s fourth-largest lender, Bankia, was part-nationalised after the authorities announced it would require €24 billion in state funds to keep it afloat.