The Spanish government may decide in October whether to request a one-year extension of the European rescue facility for its banks, Bank of Spain Governor Luis Maria Linde said on Monday.
“The government is going to have to make that decision and I suppose it would be in October,” he told reporters in Spanish on the sidelines of the economic Conference of Montreal. He declined to give his own opinion on an extension and said it was an open question.
He also said it was important for the government to sell two small nationalized banks, Catalunya Banc and NCG Banco, as they become less attractive over time, but he said they should only be “sold well, not badly.” He did not elabourate.
“The Spanish state has no intention of holding onto the banks,” he said. “It does not want public banks.”
Spain has until the end of this year to tap up to 100 billion euros ($133 billion) of European rescue money for its banks. It has only used 41 billion of the emergency credit line so far but an extension would give it extra breathing room if more capital needs came to light.
The Spanish newspaper El Pais reported on Monday that the European authorities and the International Monetary Fund planned to recommend that Spain request an extension of the facility as a safety net.