Spain to soon create "bad bank" for toxic assets

PHILIPPE HUGUEN/AFP/GettyImages

(AP) MADRID - Spain's economy minister says the government is set to approve a new law creating an asset management agency, or "bad bank," to deal with the toxic assets that have led many Spanish banks to seek a European Union bailout.

The toxic assets - expected to total 200 billion euros ($244.9 billion) - will be segregated from the banks, and dealt with by the new agency.

Luis de Guindos said Sunday in an interview with newspaper ABC that the law is up for approval Aug. 24.

The EU is to provide up to 100 billion euro ($122.9 billion) for banks struggling from non-performing loans, foreclosed property and other unwanted assets resulting from the collapse of Spain's real estate market.

Leading Spanish banks, such as Banco Santander SA, are not expected to need help.