Spain nationalizes fourth-largest bank as crisis deepens
Source: usatoday.comSpain’s government will effectively nationalize the nation’s fourth largest bank to shore up the hurting banking sector and try to convince investors the country doesn’t need a bailout like those taken by Greece, Ireland and Portugal, the Economy Ministry said Wednesday.
Under the deal, €4.5 billion ($5.9 billion) in funding that Bankia SA received from Spain in 2010 and 2011 will be converted into shares of the institution’s parent company, the ministry said in a statement.
On Friday, the government is expected to announce a more wide-ranging banking system overhaul to free up frozen credit as Spain weathers a recession and 24.4% unemployment — the worst jobless rate among the 17 nations that use the euro.
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