Spanish government denies run on bank
Spain denies reports on bank run.
The Spanish government is denying a report that said customers withdrew over one billion euros, or $1.3 billion, from the nationalized lender, Bankia, over the last week.
Spanish banks may have to write off more bad loans.
Economy Secretary Fernando Jimenez Latorre denied a deposit flight was underway. "It's not true that there is an exit of deposits at this moment from Bankia."
Bankia tried to reassure its customers. "Bankia's operations have been within their usual parameters at the branch network over the past few weeks. The trend in activity shows deposit balances will not register substantial changes in the next few days."
Shares in Bankia have decreased about 30% today, as small investors sold their holding which have lost nearly two-thirds of their value since a flotation in a July stock market listing.
"Bankia depositors can be absolutely certain about the security of their savings that they have entrusted with the bank," said newly-appointed Chairman Jose Ignacio Goirigolzarri.
It is reported that Goirigolzarri had told the board meeting about the flow of money from the banks. According to the meeting, one billion euros were equal to about 1% of retail and corporate deposits at the bank. The government took over Spain's fourth largest bank to calm the fears that Bankia couldn't handle huge losses caused by a property crash, which began in 2008.
© 2012, Distributed by NEWS CONSORTIUM.
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Pope Benedict XVI's Prayer Intentions for January 2013
General Intention: The Faith of Christians. That in this Year of Faith Christians may deepen their knowledge of the mystery of Christ and witness joyfully to the gift of faith in him.
Missionary Intention: Middle Eastern Christians. That the Christian communities of the Middle East, often discriminated against, may receive from the Holy Spirit the strength of fidelity and perseverance.
Keywords: bank, run, Spain, government, money, economy
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