The New York Times
By RAPHAEL MINDER, August 31, 2012
Spain’s economy minister, Luis de Guindos, voiced confidence on Friday in the “bad bank” plan. (Paul Hann/Reuters)
MADRID — The Spanish government on Friday approved the creation of a so-called bad bank to absorb the most troubled real estate assets of the country’s financial institutions, helping to clear the way for Madrid to receive European rescue money for Spain’s troubled banking industry.
The move is meant not only to let Spanish banks eventually begin to receive money from the €100 billion, or $126 billion, reserve that European finance ministers have approved, but also to restore market confidence in the country’s banking system. Spanish banks have been having problems borrowing money, even as depositors withdraw money at a rising pace and move it to foreign banks.
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