Spanish Banks Need $68 Billion To Regain Market Confidence, Says Moody's (MCO)

Rating agent Moody's MCO said on Monday that Spanish banks may have to raise $68.77 billion (double what the government had forecasted) in order to regain market confidence. Moody's analyst Alberto Postigo commented, "We remain cautious on the ability of the new government's plan for recapitalization to allow Spanish financial institutions to regain markets confidence, as this would very likely require a full clean-up of losses embedded in banks' balance sheets." The warning comes as Qatar stated plans to invest €300 million ($414.36 million) in Spain's savings banks, potentially the first injection of sovereign capital into the savings banks since the 2007-08 crisis. Postigo added that the €100 million was a “credit negative,” despite the Bank of Spain disclosing its exposure to real estate losses in hopes of easing investor concerns. With the banks struggling to raise the cash, the Spanish government has delayed the deadline for the banks to attract private investors by six months to March 2012.