A large portion of the payout--€19 billion will aid Bankia, the giant lender whose collapse last May was responsible for the €100 billion in bailout funds negotiated in June.
 
The Spanish government has yet to draw a line under its banking crisis and plans to set up what it calls a bad bank in which it will essentially become a partner as equity holders with private investors.
 
The four banks receiving aid now have a clearer future but the entire banking sector of the country is still in trouble.
 
Banks are not lending because there is little confidence in Spain’s economy. The government wants to limit assets in the bad bank to €90 billion.
 
The International Monetary Fund said it would be difficult to set up a bad bank while the correction in housing in Spain is still in force.
 
Banco deValencia was the only one of the four receiving aid that analysts said would be able to stand on its own after receiving funds.
 
An independent report published in September said that Spain’s banking sector could need as much as €59.3 billion in additional funding.
 

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