FRANKFURT (MNI) – The European Central Bank on Wednesday denied a
media report that said it had rejected a plan by Spain to recapitalize
troubled Bankia, the country’s fourth-largest lender, via ECB funding
operations.
The ECB said it had not been consulted on the matter and had not
taken a position on it. The central bank added that it is prepared to
advise Madrid on the development of recapitalization plans.
The Financial Times reported on Tuesday night that the ECB had
firmly rejected a plan by Madrid to inject E19 billion worth of
government bonds into Bankia, which would then use them as collateral to
obtain cash at the ECB’s 3-month refinancing window.
The paper quoted two unnamed European officials, who reportedly
said that the ECB told Spain such a plan would risk violating the EU’s
ban on monetary financing.
Spain’s Prime Minister Mariano Rajoy had said earlier that his
government did not discuss the matter with the ECB.
Today’s ECB statement follows:
“Contrary to media reports published today, the European Central
Bank (ECB) has not been consulted and has not expressed a position on
plans by the Spanish authorities to recapitalise a major Spanish bank.
The ECB stands ready to give advice on the development of such plans.”
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