SPAIN is finalising plans to find fresh funds for its troubled savings banks, officials said, prompting speculation the government may have to spend more while fighting to slash a massive deficit.
Madrid hopes the regional banks can raise the capital -- which it has been denied would reach the €30bn (£25.4bn) cited in a newspaper report from private investors. No private capital deals have yet been struck.
Spain will have to raise more capital in the money markets to shore up a banking system heavily exposed to a collapsed property market, economists say. The regional banks are at the heart of concerns Spain may seek an Ireland-style bail-out.
Spain’s risk premium over benchmark German debt narrowed, falling to its lowest level since mid-November.