Spain: 'bad bank' to be 55 pct privately owned

Associated Press
Spain's Economy Minister Luis De Guindos, right, and European Commissioner for Economic and Monetary Affairs Olli Rehn attend a press conference after a meeting at the Ministry, in Madrid, Monday, Oct.1, 2012. (AP Photo/Daniel Ochoa De Olza)
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Spain's Economy Minister Luis De Guindos, right, and European Commissioner for Economic and Monetary Affairs Olli Rehn attend a press conference after a meeting at the Ministry, in Madrid, Monday, Oct.1, 2012. (AP Photo/Daniel Ochoa De Olza)

MADRID (AP) — Spain's Economy Minister Luis de Guindos says a 'bad bank' being set up to allow lenders to offload bad investments will be 55 percent privately owned.

Speaking Wednesday in Parliament, De Guindos says the stake in the bad bank would be offered to private sector companies, who might hope to turn around the bad investments and eventually make a profit.

De Guindos defended Spain's banks, saying an audit last week showed "70 percent of the financial sector is in condition to handle a severely stressed situation."

The audit said seven banks hardest hit by the 2008 collapse of the property market will need another €59.3 billion ($77 billion) to survive a severe downturn.

The minister says Spain will tap a "greatly inferior" amount from its €100 billion eurozone rescue loan.

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