Spain injects €9bn into ailing lender Bankia

Luis de Guindos told the Spanish parliament that the government would do whatever was needed to rescue Bankia, while stressing that the situation “shouldn’t be extrapolated to the nation’s entire banking system”. In what amounted to an attempt to bolster confidence and prevent a run on Spanish banks, he said directors at the nationalised lender would present a plan indicating the level of capital needed to meet all regulatory requirements. Announcing the taxpayer bailout after markets had closed, Mr de Guindos said: “The government will fully back the capital needs which result from this plan.” He said €9bn would cover capital needs of €7.1bn to comply with two banking reforms presented by the government as well as €1.9bn of capital buffers to comply with European-wide rules. Bankia is the country’s fourth-largest lender and was formed in 2010 by merging seven of Spain’s regional savings banks. It has the greatest exposure to toxic property assets.