Moody's considers Spain’s restructuring plan to be ‘positive’

A move by Spain to restructure its banking sector could help banks regain access to market funding and reestablish investor confidence, Moody's Investors Service said today in its Weekly Credit Outlook.

"We consider the government's plan credit positive since it will compel the clean-up of losses embedded in banks' balance sheet and improve transparency on banks' real financial health, helping to restore much needed market confidence," Moody's said in its report.

According to international news agencies, the Spanish plan aims to increase provisioning for real estate assets and help align the book value of those assets with their true market value.

The rating agency expressed its skepticism though regarding small banking mergers with big bank corporations

Last week, the Spanish government has passed major banking reforms aimed boosting its economy. The new bill forces banks to set up a financial safety net worth 50 billion euros and limits the salaries of top bankers.