Spanish bank recap to cost half earmarked money - Regling
VIENNA (Reuters) - Recapitalising Spanish banks will likely cost only half the original estimate of up to 100 billion euros ($127.83 billion) that was set aside for the exercise, the head of euro zone bailout funds said on Monday.
"We will probably need only around half of that," said Klaus Regling, head of the European Stability Mechanism, citing the latest estimates for recapitalising the sector.
His comment to a financial seminar in Vienna was in line with Spanish estimates.
A draft amendment before parliament last month showed Spain will tap 60 billion euros from a European credit line agreed in June to recapitalise its troubled lenders, but the government still planned to use only 40 billion of that.
The figure is lower than originally planned because some banks will manage to raise funds by themselves, junior bondholders are expected to take a haircut on their holdings, and transferring assets into a bad bank can free up capital. ($1 = 0.7823 euros)
(Reporting by Michael Shields; editing by Ron Askew)