Spain has overhauled its banks for the fifth time in three years on Friday to secure up to 100bn euros ($125bn) in European aid for lenders crushed by bad loans from an extended property market crash.
The government created a so-called bad bank to take over tens of billions of euros in defaulted loans and unsaleable
property and to accelerate the clean-up of the banking sector, Economy Minister Luis de Guindos said.
Spain's banks are at the heart of the euro zone debt crisis, but the rescue has not cleared up doubts over the country's finances and the government is now under pressure to ask for a full sovereign bailout like Greece or Portugal.
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At least four Spanish banks, all of which have already been taken over by the government, are set to receive aid money under the rescue measures.
The bad bank will begin operating in late November or early December, exist for between 10 and 15 years, and is intended to be profitable over that period so that Spanish taxpayers do not bear the burden of the bank rescue operation.
"The prices of these assets (that banks transfer to the bad bank) must ensure that the entity does not generate losses during its lifetime, something that is very important to minimise the impact on taxpayers," said de Guindos.
De Guindos also announced new rules for quicker and easier government takeovers of problem banks, a cut in pay for executives at banks that have been rescued by the state, and rules that will stop banks selling complex securities to unsophisticated investors.
Spain asked for a European rescue for its banks in June after it took over Bankia, a large lender that was particularly exposed to the property market, and found that it needed 19 billion euros to cover its losses.
De Guindos said Bankia could get emergency liquidity from the government before the European rescue funds are disbursed.
Despite the aid for the banks and an aggressive government drive to cut the public deficit, Spain's borrowing costs remain painfully high.
The economy is contracting and a quarter of workers are jobless, which means tax revenue is falling and this is undercutting the austerity drive.