ECB on Bankia: “we have not been consulted on Spanish recapitalisation plans”

The European Central Bank (ECB) confirmed it was not consulted by the Spanish authorities on the possible bail-out of troubled lender Bankia via the ECB.

“Contrary to media reports published today, the European Central Bank has not been consulted and has not expressed a position on plans by the Spanish authorities to recapitalise a major Spanish bank. The ECB stands ready to give advice on the development of such plans,” the Central Bank said in a public statement.

According to news reports published over the last days, Spain’s government was considering the use the sovereign paper as collateral to get cash from the EBC, forcing it to be involved in the restructuring.

Such plans where in danger of breaching an EU ban on monetary financing or central bank funding of governments, according to the ECB.

Meanwhile, Bank of Spain’s Governor Miguel Angel Fernandez Ordonez announced it will resign a month early, leaving on June 10 instead of July 12.

Spain is currently faced with the task to convince investors and EU institutions that it will be able to limit spill-over effects caused by the €180bn junk property loans within its banking sector.

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