Spain, Europe Debt Crisis | featured news

Spain could ask for a rescue of its struggling banks this weekend when European finance ministers hold an emergency conference call Saturday to discuss the country's financial problems, a move that would make it the fourth member of the 17-nation eurozone to seek outside help since the continent's debt crisis erupted two years ago.

Spain's banks need at least 40 billion euros (about $46 billion) in fresh capital to preserve the country's financial stability, the International Monetary Fund said Friday in an eagerly-awaited report.

Stocks closed out its best week of the year Friday, as investors played things close to the vest before the weekend when Spain is expected to request aid for its troubled banks.

Spain could decide this month to ask for a bailout for its troubled banking sector, a step that would make it the fourth country in the 17-member eurozone to seek help since the EU debt crisis broke out....

Stocks fell Friday, as investors erred on the side of caution ahead of a weekend expected to bring new developments in dealing with Spain's banking crisis.

Spain's credit rating was slashed by three notches on Thursday by Fitch, which signaled it could make further cuts as the cost of restructuring the country's troubled banking system spiraled and Greece's crisis deepened.

Spain's high borrowing costs mean it is effectively shut out of the bond market and the European Union should help Madrid recapitalize its debt-laden banks, Treasury minister Cristobal Montoro said on Tuesday.

Spain, the latest combat zone in Europe's long-running debt wars, urged the euro zone to set up a new fiscal authority to manage the bloc's finances and send a clear signal to markets that the single currency project is irreversible.

Spaniards alarmed by the dire state of their banks are squirreling money abroad at the fastest rate since records began, figures showed on Thursday, and the credit ratings of eight regions were cut.