Anticipating the plans that new Bankia president José Ignacio Goirigolzarri will unveil at the end of this month, the market is dying to see the true picture of the bank's accounts.
The accounting firm Deloitte is in the midst of an investigation of Bankia's 2011 accounts, and at this point it looks like the bank needs 10 billion euros, which is close to the 6.5 billion euros that the bank's former president, Rodrigo Rato, had cited before learning of the complicated requirements of the Spanish government's latest round of financial sector reforms.
The stimulus of public funds will further dilute Bankia shares, which fell 14.08% yesterday and closed the trading session at 1.42 euros per share. Since July 19 of last year, when Bankia went public, its shares have plummeted 62.08%.
Besides these effects and the amount of the bailout, which when it occurs ought to be returned to the public exchequer, the really urgent thing at this time is to undertake a drastic and deep cleanup of Bankia in order to quiet rumors about a massive fund withdrawal, which are being slowly fed by reckless television announcers. Fortunately, the Spanish government responded to these rumors yesterday and representatives from the Ministry of the Economy and Bankia spoke up to slow down the disastrous effect that TV commentators could have had on the company and the entire banking sector. Restraint and swift action are necessary to clean up Bankia, which can only be under government control for three years.
