SPAIN’S economic woes have taken another turn for the worse after 16 of the country’s banks were downgraded.
Ratings agency Moody’s took the decision citing the Spanish government’s reduced ability to shore up the banks.
Reports suggested that customers had withdrawn as much as €1 billion from Bankia, sparking a drop of 30 per cent in the share price of Spain’s fourth largest lender, although this was later refuted.
“It is not true that at this time a flight of deposits from Bankia is taking place,” said Fernando Jimenez Latorre, the deputy economy minister.
In a statement sent to Spain’s stock market, Bankia attempted to calm customer fears: “Bankia’s clients can be absolutely calm about the security of the savings they have deposited.”
Among the bank’s to be downgraded were Banco Santander, along with Santander UK.