ECB decides against bailing out a failing Spanish bank

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A Spanish proposal to bail out its fourth largest bank has been rejected by the European Central Bank.

Madrid had planned to recapitalise troubled lender Bankia by tapping into the ECB, using government bonds as security to borrow €19bn.

If the deal had worked, it would have meant that the ECB, and not the Spanish government, was rescuing the bank.

BBC Radio 5 live Wake Up To Money got reaction from Pedro Schwartz, an economics professor at San Pablo University in Madrid.

On Thursday, Radio 5 live will be taking a closer look at the eurozone troubles: Breakfast's Rachel Burden will be in Athens, Shelagh Fogarty in Ireland, Drive's Peter Allen in Frankfurt and reporter Adam Parsons Madrid. They will be un-picking the problems that face the continent's economy and examining where to go from here.

To listen to other Radio 5 live interviews, please visit the Best Bits page.

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