Also "private investors will have to share the costs of the clean-up“. This is what we read in the press release of the Spanish public bank rescue fund (Frob) addressed to the shareholders of Bankia, the credit institution which was nationalized a few months ago by the Madrid government and which risked bankruptcy due to over 40 million toxic securities among its assets.
In other words, the Frob has communicated to the shareholders that they will have to bear part of the losses. This caused a collapse in the value of the share on the Madrid Stock Exchange which came to lose up to 27%. In the middle of the day, however, the stock reduced the decline and lost 1,52% to 1,49 euros per share.
The news came a few days laterannouncement that the European Union was preparing to deliver 19 billion euros as part of the memorandum of understanding (Mou) signed with Madrid and which will cover the Spanish banking system up to 100 billion euros to recapitalize the institutions most at risk.
