The fact that Rodrigo Rato proposed to Luis de Guindos a 6.5-billion euro aid program is an acknowledgement on his part that things are not going as well as he said.
Bankia has a problem that its president was aware of. This signifies that the condition of the Spanish banking sector is far more deteriorated than previously thought and that the government miscalculated the amount of provisions needed to back the banks.
53 billion euros was the original amount that experts predicted the banking sector needed, but this amount could rise another 40%. Some analysts have mentioned 100 billion.
This also underscores the need for a bad bank, which could have been created in January. It is a bad practice to only take measures when the water has risen past your neck.
