MADRID (AFP)--Prime Minister Jose Luis Rodriguez Zapatero will
meet the heads of Spain's six largest banks later Monday to urge
them to step up lending so as to help tackle the nation's first
recession in 15 years.
The meeting between the prime minister and the heads of Banco
Santander (STD), the largest bank in the eurozone, BBVA (BVA.MC),
Banco Popular SA (POP.MC), La Caixa, Bancaja and Caja Madrid will
get underway at 1700 (1600 GMT), the government said.
Zapatero said Sunday he will ask the banks to boost the flow of
credit, saying an economic slowdown wasn't a time to make large
profits.
"I will tell them, with all my power and conviction, that this
is not the time for large profits. It's the time to support credit
and financing for families and companies in this country," he
said.
Banks say they haven't turned off the credit tap but many small
businesses say they are facing bankruptcy because they aren't able
to get funds, while consumers report growing difficulties in
securing a mortgage or a loan to buy a new car.
The government has promised to guarantee interbank lending up to
EUR100 billion in 2009, the same amount as last year, and has a
special fund of EUR50 billion for acquiring bank shares in order to
make cash available to lenders.
In an interview with Spanish radio, European Commissioner for
Economic and Monetary Affairs Joaquin Almunia said "if banks do not
have solvent results, they are not going to loan money.
"What is necessary is that banks and the government are
synchronized and row in the same direction, towards the
reestablishment of confidence," he said.
Click here to go to Dow Jones NewsPlus, a web front
page of today's most important business and market news, analysis
and commentary. You can use this link on the day this article is
published and the following day.