An IMF report on Spanish banks to be released on Monday would estimate the cost of refinancing them at between 40 and 80 billion euros ($50-100 billion), Spanish newspaper ABC said Thursday.
The International Monetary Fund has set out two scenarios, according to a source quoted by ABC who it said had reviewed a draft of the document.
One estimate, based on the current situation in Spain, says 40 billion euros would cover the refinancing needs of the 10 banks including Bankia, which Madrid plans to rescue with an historic bail-out worth 23 billion euros.
The second, 80-billion-euro scenario addresses the possibility of a severe Spanish recession that would require a rescue of the entire banking sector.
But sources told ABC that this nightmare scenario was considered “unreal.”
Spanish authorities have given themselves two weeks to take a decision on how to recapitalize weakened banks, which might require Madrid appealing for international financial aid, Finance Minister Luis de Guindos said Wednesday.
In addition to the IMF report, officials are waiting for assessments by two private auditing firms, Roland Berger and Oliver Wyman, on the country's financial sector.
Analysts have mooted a final bill for Madrid at somewhere between 60 and 200 billion euros, but the Spanish budget ministry said Tuesday that the figure would “not be very high.”
Bankia’s request for much more state aid than initially expected has raised tension on financial markets because analysts are not sure Madrid can afford a broad restructuring of the country's banking sector by itself.
Spanish officials insist however that the country will not have to follow Greece, Ireland and Portugal in asking for aid from the European Union and IMF, which would put Madrid’s finances under tight international scrutiny.