Spain may toughen the capital requirements for its savings banks even more than initially planned, dpa quoted Economy Minister Elena Salgado as saying on Wednesday. The savings banks, known as cajas, are considered the Achilles' heel of the Spanish banking sector. They play an important role in determining market confidence and whether Spain may need an international bailout. The government had announced on Monday that it would double the minimum core capital ratio for banks and cajas to 8 per cent. But Salgado on Wednesday said the ratio could in some cases be raised to as much as 10 per cent, for instance for cajas not listed on the stock exchange. The definitive figure will only be announced when a decree on the savings banks reform will be approved in February, the minister said. "The Spanish financial system is solvent, but market conditions are changing," Salgado said, stressing the need for cajas to "reinforce their solvency." -- SPA
