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Reform plan for Spanish banks due

A reform package for Spain's troubled banks, aimed at convincing investors that the sector is solvent and the country has a strategy to avoid a bailout, is expected to be released.

The government package is expected to include measures obliging banks to increase provisions against bad loans and possibly plans for the creation of a new entity that would act as a "bad bank".

The government may also disclose details on its nationalisation this week of Bankia, the Spanish bank with the highest exposure to bad property loans following a crash in the construction sector that started in 2008.

Spain is in its second recession in three years and is battling to reduce a swollen deficit and 24.4% unemployment.

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From Belfast Telegraph