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Spanish bank borrowing from ECB rises in May

Published on 14/06/2011

Spanish banks raised their borrowing from the European Central Bank in May, the Bank of Spain said Tuesday, in a new sign of sliding market confidence in their financial health.

Borrowing from the ECB by the country’s banks during the month climbed 26 percent from April to 53.05 billion euros ($76.6 billion), climbing above the 50 billion euro mark for the first time since January.

However, the figure was sharply down from 85.6 billion euros in the same month last year.

And it remains well below the record 130.2 billion euros that Spain borrowed from the ECB in July, 2010, when the country came under pressure on the markets in the fallout from the Greek debt crisis.

The increased borrowing was viewed as a sign that Spanish banks were finding it more difficult to meet their funding needs on the markets, amid new uncertainties over a bailout for debt-ridden Greece.

Spain is struggling to emerge from an economic crisis that began in late 2008 and to convince nervous markets it will not require a bailout similar to those granted Greece, Ireland and Portugal.