Article: Rescue fund for Spain's banks

SPAIN'S SOCIALIST government plans to reshape the country's financial sector with the help of a [euro]9 billion rescue fund aimed at troubled savings banks and set to be launched this month, Spanish finance minister Elena Salgado said yesterday.

The fund - which could borrow to leverage itself tenfold and so deploy up to [euro]90 billion to finance recapitalisations and mergers - would enable the Bank of Spain to take control of banks that run into difficulties following the collapse of the Spanish housing market.

"In anticipation of possible problems, we thought it was a good moment to go ahead with a restructuring," said Ms Salgado.

Spain's commercial banks and cajas de ahorros, its ...

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