Spain Will Have To Cede Most Control Of Banks

Spain will likely have to cede most control over its banks to Europe in exchange for assistance, according to a draft agreement of the bank bailout agreement, The Wall Street Journal reported. The requirements could mean holders of junior bonds and preferred shares issued by banks that are bailed out will face losses, said the newspaper in its online edition.

The bailout agreement is expected to be signed off by EU officials on July 20. European Union officials agreed this week to give Spain more leeway on its deficit targets and said some 30 billion euros ($37 billion) would be available by the end of this month for banks. Many individuals in Spain have bought preferred shares of local banks, the newspaper reported.

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