Ateneo Professor on Entrepreneurship
As early as May 28, Spains Prime Minister Mariano Rajoy denies that there is a need for a bail out fund. But the state rescue fund, known as FROB has only 6 billion euros on hand. The amount can give a chance for banks to really clean up balance sheet and strengthen the financial system.
What will the state do with the fund? One is to follow the Irish example: to put up a bad bank who will buy bad loans at say 30% to remove them from the bank;s balance sheet and at the same time shore up their liquidity. Then maybe, the bank can buy back the bad loan if the market turns up right.
Is there a bank run in Spain?
Spain's $125 billion rescue package.
Bloomberg video on Spain's rescue package
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