Your report is 'inaccurate' Santander tells Barclays

Santander has dismissed as “inaccurate” a researchreport by Barclays analysts that warned the Spanish lender could need to raise nearly €18bn (£14.7bn)in new capital.
The Barclays report, entitled Capital doesn’tadd up, claimed that Santander’s domestic Spanish business has a capital-loss buffer about one-fifth the sizestated by the bank’s accounts.
“While Santander reports a 10pc core Tier 1 ratio for its Spanish business, it’s more like 2pc based on the capital that is actually available to absorb domestic losses. This suggests a €15bn to €18bn capital deficitin Spain,” wrote Barclays analyst, RohithChandra-Rajan.
Mr Chandra-Rajan argued that Santander’s accounts “overstate” the ability of its Spanish business to absorb losses by including capital that is
effectively locked up in foreign subsidiaries. He claimed that capitalwould be unavailable to the parent companyshould it be hit by newlosses in its domestic operations.

three major tools the Bank uses to implement monetary policy

three major tools the Bank uses to implement monetary policy: 1. Open Market Operations: Through open market operations, the Bank buys or sells securities in the secondary market in order to achieve a desired level of Bank reserves. Alternatively, the Bank injects money into the economy through buying securities in exchange for money stock. As the law of supply and demand takes effect to determine the costof credit (interest rates) in the money market, money stock adjusts itself to the desired level. This process influences availability of money in the economy. 2. Discount window operations: The Bank, as lender of last resort, may provide secured short-term loans to commercial banks on overnight basis atpunitive rates, thus restricting banks to seek funding in the market resorting to Central Bank funds only as a last solution. The discount rate is set by the Central Bank to reflect the monetary policy objectives. 3. Reserve Requirements: TheCentral Bank is empoweredby the law to retain a certain proportion of commercial banks' depositsto be held as non-interest bearing reserves at the Central Bank. An increase in reserve requirements restricts commercial banks ability to expand bank credit and the reverse is regarded as credit easing

Price Level

Price Level - The overall level of prices of goods and services in an economy. This isused in the calculationof inflation rates.

Nominal Interest

Nominal Interest - The percent of the amount borrowed paid each year to the lender by the borrower in return for the use of the money not taking inflation into account.

Purchasing Power

Purchasing Power - The real value of a dollar. This describes the quantity of goods and services that can be purchased for a dollar, taking into account the effects of inflation.

Quantity Theory of Money

Quantity Theory of Money - The theory that says that the value of money is based on the amount of money in circulation, that is, the money supply.

Liquidity

Liquidity - The ease with which somethingof value can be exchanged for the currency of an economy.

Fiat Money

Fiat Money - Money that has no intrinsic value, that is, its only value comes from the fact that a governing body backs and regulates the currency.

Store of Value

Store of Value - A good that holds a value in such a way that its price is fairly insensitive inflation.

money

money-coins and paper currency issued by a government for payment of debts and for purchase of goods and services.