“ORIGINAL (12:30 PM ET): Markets are shooting higher after headlines indicating that the IMF might be willing to backstop Spain even if the country and EU leaders can’t make a plan to backstop failing bank Bankia.
The Spanish government has struggled to find a way to backstop the country’s third-largest bank and biggest holder of domestic real estate assets.
It recently agreed to bail out the failing bank, after mergers and loans failed to cleanse its balance sheet. The European Central Bank recently rejected a proposal in which the Spanish government would issue €19 billion in domestic government bonds to the troubled lender that it could use as collateral against an ECB loan, according to reports. Spain may also have considered issuing €19 billion in debt to the public to finance the bailout.”
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