Confirming bank bailouts are unnecessary, Bankia bailout 'investment, not loan'

The Telegraph had an article that confirms that government bailouts of banks in a modern financial system, a system with deposit guarantees and access to central bank funding, is completely unnecessary and detrimental to the health of the real economy.

The president of Spanish lender Bankia says the €23.5bn in state aid it will receive in the country's biggest-ever bank bailout will be treated as an investment to make profit for the government and not as a loan. 

In a statement released on Sunday, Jose Ignacio Goirigolzarri appeared to be trying to reassure markets after the press questioned what he meant by comments the day before that "we don't need to talk about giving any of it back". 

He says Bankia's responsibility is not to return that capital, but "to generate value and profitability for that contribution". 

Given that management sees the bailout as an investment, why didn't management get the money from the private sector?

Is the investment from the government at terms that are far more favorable than the private sector would offer?  If so, this is a bad deal for Spanish taxpayers.

Are there any private investors who are willing to invest in Bankia?  In the absence of ultra transparency, why would they because they have no way to assess the risk?

The news came after it was revealed that Bankia expects to sell off its vast portfolio of industrial holdings, that includes a stake in the parent company of British Airways and Iberia.

Why haven't these already been sold to absorb the losses the government and previous Bankia management team knew were on Bankia's balance sheet?

Mr Goirigolzarri, who took over as president of Bankia earlier this month, outlined plans a day after it emerged Spain's fourth largest saving bank would need a bail-out fund of a further €19bn (£15bn) from the government. 

Bankia would be "solid, efficient and profitable" after the recapitalisation Mr Goirigolzarri said, adding that the government and Bank of Spain fully backed the plan.

Confirmation that Bankia is fully capable of retaining future earnings and rebuilding its book capital level without the government bailout.

This is a very important point.  The IIF suggested that recognizing all the losses in and recapitalizing the Spanish banking sector could be accomplished in as little as 4 years if banks retained all of their earnings.

The bank's new management has identified €15.6bn in provisions it must make against potential future losses, the vast majority in toxic property loans. Last week Bankia had to revise its 2011 results to show a net loss of €2.979bn instead of the €209m it originally reported.

Without Bankia providing ultra transparency, is there any reason that market participants should believe this level of provisioning is adequate?