Wednesday, May 09, 2012


...down.  More of this to come.

In a deal that will give the state a 45 percent indirect stake in Bankia, the government will take control of its parent company BFA by converting into equity a 4.5 billion euro loan it had given the financial group previously, the central bank said.

The economy ministry pledged to do all it takes to clean up Bankia, which has more than 30 billion euros of exposure to troubled loans to property developers and repossessed land and buildings.

The government is expected to lend or give Bankia up to 10 billion euros in additional aid, though some bank analysts say it will need more.

Uncertainty over the final cost of the country's banking reform hit the euro, Spanish debt and global stock markets on Wednesday.

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