SPAIN SETS BANK PROVISIONS FOR HIGH-RISK BORROWERS
The Bank of Spain said banks must make
provisions amounting to at least 25 pct of outstanding loans to
countries deemed to be high-risk borrowers.
    The measure was included in a package of circulars approved
by governors of the central bank yesterday.
    The bank said it was retaining a complex system for
calculating the proportion of loans which must be covered by
special provisions but added that sudden shifts in the
situation of borrowers had made it advisable to set a minimum
level of 25 pct for such provisions.
    The bank said another measure instructs banks and financial
institutions to begin setting aside provisions for future
pension obligations.
    Banks were obliged last year to ensure that they had made
sufficient provisions for current pension obligations and a new
circular sets a maximum time limit of five years to cover
future obligations.
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