The government-backed Fund for Orderly Bank Restructuring (FROB) fund for banks restructuring would take equity stakes in banks for a maximum five -year period.
The move is part of the Spanish government’s effort to shore up investor confidence in the euro zone’s fourth-largest economy.
The Spanish finance minister, Elena Salgado, said preliminary estimates by the Bank of Spain on the capital needs of the country’s banking sector are below €20bn.
All eight major Spanish banks passed European Union bank stress tests conducted in July but five out of 19 regional lenders examined failed.
Salgado said increasing the core capital ratio would ensure that all Spanish lenders would pass a new round of European bank stress tests that will be held later this year.
