FX.co ★ Spanish banks to seek €30 bln in ECB loans

Spanish banks will seek around €30 billion ($39 billion) in loans from the European Central Bank's program to spur lending to businesses and households, Spain’s Economy Minister Luis de Guindos said in an interview. Taking into account positive credit reputation, Spanish banks have a fair chance of getting ECB’s approval to lend €30 billion. The Spanish delegation relies on the ECB to allocate this amount at the first auction. The delegation of Spanish lendees will be headed by Economy Minister Luis de Guindos. "These loans will allow businesses and individuals to get credit on very competitive terms," De Guindos told La Vanguardia newspaper. Importantly, two months ago, the ECB embarked on the new long-term cheap lending program. It aims to encourage banks to lend more thus reviving economic growth in Europe. Moreover, the regulator ventured into unprecedented changes in the monetary policy in the context of fighting low inflation in the euro zone. The first part of the ECB's new bank funding plan is scheduled for September 18 and the second is slated for December. The regulator set the same interest rate for both stages. The ECB President stated €400 billion will be allocated at the first stage aimed at supporting the flow of credit to businesses in the euro zone. Therefore, banks’ financial records have to meet extra requirements as ECB officials are supposed to check appropriate use of credits. Credits given at all stages of the long-term cheap lending program have to be repaid in September 2018. Speaking about Spain’s economy, GDP expanded 0.6% in Q2 as compared to the previous quarter, the statistics agency INE reported.