‘Building Societies’ excludes Nationwide.
Transparency and disclosure are very important but we believed it was not sufficient. We have thus been working closely with the Vice-President on strengthening our banks’ solvency. A result of this has been the recently approved Royal Decree-Law, which we believe is a definitive step and a crucial quantitative and qualitative leap forward in restoring market confidence in Spanish banks. The aims of the new Royal Decree-Law are very clear. The first is to reinforce the solvency of all our banks, requiring them a level of core capital of 8% and because the doubts of investors over a small group of unlisted banks with some need to resort to the wholesale market, we are demanding of such banks 10% of core capital. We publicly announced yesterday which banks need capital to reach the 8–10% level, and how much capital they need. We have given them fifteen days to submit a recapitalisation plan. Those intending to tap the markets will have until end-September to attain the new level of capital. But we have made it very clear that if a bank believes it will be impossible to reach these solvency levels, it can apply to the FROB for these funds. The capital shortfall is for a maximum of € million, whereby the impact on public debt if the FROB has to be used would be relatively limited.