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Spain to probe Bankia bosses

Thursday, July 05, 2012 - 01:44

A judicial inquiry has been launched into senior executives from the bailed-out lender including the bank's ex-chairman, Rodrigo Rato, who will be investigated for fraud. Joanne Nicholson reports.

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Rodrigo Rato stood down as Chairman of Bankia in May He was forced to quit when the government agreed to bailout the Spanish lender. Now the former head of the IMF is the subject of a fraud inquiry along with a string of other bank executives. Many in Spain blame him for an aggressive Bankia share selling campaign which left them out of pocket He also earned 2.4 million euros last year despite Bankia's troubles. (SOUNDBITE) (Spanish) MANUEL, SAYING: "The one responsible for the hole in the accounts needs to be found because all Spaniards will have to pay with their hard work." (SOUNDBITE) (Spanish) DOLORES SANCHEZ RODRIGUEZ, SAYING: "I think it is a fair probe especially since so many savings banks are involved." Spain's banking sector is at the heart of the country's financial crisis. And the euro zone's fourth largest economy continues to struggle with high borrowing costs. On Thursday the Treasury sold almost 750 million euros in 10-year bonds at an average yield of 6.43 percent, up from just over six percent last year. Salvador Seco is from Inversis Bank (SOUNDBITE) (Spanish) SALVADOR ISASA SECO, DIRECTOR OF TREASURY AND MARKETS DEPARTMENT AT INVERSIS BANK, SAYING: "It's a compromising and revealing situation that we are in. In the long-term it tells us how much we will have to dig into our pockets to pay our debt." Last weekend euro zone leaders agreed to allow the bloc's bailout funds to buy bonds in secondary markets and directly recapitalise ailing banks. Joanne Nicholson, Reuters

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Spain to probe Bankia bosses

Thursday, July 05, 2012 - 01:44