ECB rejects Madrid plan to boost Bankia / Pressure on Madrid to probe Bankia’s fall

A Spanish plan to recapitalise Bankia, the troubled lender, by indirectly tapping the European Central Bank for cash, was bluntly rejected as unacceptable by the ECB, European officials said on the 29 May 2012.

News of the rejection came as Spain faced elevated borrowing costs in the bond markets, tried to persuade investors it can contain problems in a banking sector weighed down by €180bn of bad property loans and, on the day that saw its central bank governor stand down early.

El País, 29.5.12: Bank of Spain governor brings forward departure from post http://elpais.com/elpais/2012/05/29/inenglish/1338307610_868374.html

BBC News, 29.5.12: Spanish savings banks agree merger as debt crisis bites http://www.bbc.co.uk/news/business-18246886

ESO: Background information: Spain says help not needed to save banks http://www.europeansources.info/record/spain-says-help-not-needed-to-save-banks/

BBC News, 30.5.12: ECB decides against bailing out a failing Spanish bank http://www.bbc.co.uk/news/business-18266112

El País, 30.5.12: Spain’s risk premium at new high despite Brussels reprieve http://elpais.com/elpais/2012/05/30/inenglish/1338380587_851078.html

El País, 31.5.12: Spain acted in “worst possible way” on Bankia bailout, ECB’s Draghi says http://elpais.com/elpais/2012/05/31/inenglish/1338487464_234945.html

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