While reading up on STD to decide if I want to buy back shares I sold much higher, I came across an important nugget. Spain's banks didn't get in trouble with toxic debt because their national regulator didn't let them.
US banks could be sitting where STD is today in terms of stability, if someone in Washington had cared to step in and stop the disaster.
Chairman, Spanish banks don't need government help 16-Oct-08 07:19 am
-(Dow Jones)- Spanish banks don't require government aid to shore up their capital as they remain strong and solvent, Banco Santander SA (STD) chairman Emilio Botin said Thursday.
"In my opinion, Spanish entities don't need the government to take stakes, as they've done in other markets, given their solvency and strength," Botin said, according to a transcript of a speech given Thursday in Madrid.
Lack of oversight by regulators and excessive risk taking in an extraordinarily favorable environment led bankers to lose sight of banking fundamentals, Botin told participants of a banking conference.
Banco Santander is the euro zone's largest bank by market capitalization and has about $1.35 trillion in assets. The bank is taking full advantage of the unfolding financial turmoil, having bought three ailing banks in the last three months.
Earlier this week, Santander agreed to buy the rest of Sovereign Bancorp Inc. (SOV), a large U.S. thrift that it didn't already own for $1.9 billion in stock, paving the way for the Spanish bank to build a significant presence in the U.S.
In his speech, Botin said the ongoing financial turmoil shows the importance of having a healthy and sustainable banking system.
Spanish banks have so far weathered relatively well the global financial crisis because they largely avoided investing in the troubled U.S. subprime market, partly due to a strict banking regulator.
"The Bank of Spain, our regulator and supervisor, has played a crucial role," Botin said. Europe, Botin said, needs clear rules to follow in a crisis. "We need a road map," he said.
The U.K. government's bank bailout plan, and measures taken by other European countries over the weekend to boost capital at banks and inject liquidity into the system, point to a more coordinated response to the crisis, Botin said.
However, managing liquidity will remain a priority also after the crisis has passed, as will the need for closer supervision and regulation of the banking sector.
The financial system, he said, will emerge from the crisis being more transparent, and with a more complete and coordinated regulatory framework. |
