Portugal's request for a bailout from the European Union hasn't so far rattled its neighbor Spain, which was able to sell bonds comfortably on Thursday, The Wall Street Journal reported. In a sharp shift from last year, when financial bailouts of Greece and Ireland shook the whole euro-zone periphery, the stability of Spain's borrowing costs suggests markets currently don't believe the country will be the next domino to fall. In a closely watched auction on Thursday, the Spanish government sold €4.130 billion of three-year bonds, offering around 3.57% interest.

Three years into Spain's economic crisis, the worst could still be to come for the country's ailing banks as they grapple with falling profits and rising bad debt, the central bank chief warned Tuesday, The Wall Street Journal reported. "2011 will be another year of adjustment, and for the banking sector, it will be one of the worst," Bank of Spain Governor Miguel Ángel Fernández Ordóñez said at a conference. Mr.

Spanish jobless claims rose again in March, adding to signs of a softening economy amid growing political uncertainty, The Wall Street Journal reported. Jobless claims rose by 0.8% to 4.3 million in March from February, a new record high, the ministry said in a statement Monday. In annual terms, March claims were up 4% from a year earlier. The ministry didn't give an unemployment rate, but data last week from the European Union's statistics arm Eurostat showed Spanish unemployment stood at 20.5% in February.

Ailing Spanish savings bank Caja de Ahorros del Mediterráneo Thursday began discussing its possible nationalization with the central bank after its merger with three small peers fell apart late Wednesday, The Wall Street Journal reported. A CAM spokesman said the Alicante-based savings bank, or caja, is presenting the Bank of Spain with a new business plan and an application for money from Spain's state-financed Fund for Orderly Bank Restructuring, also known as FROB.

Only the largest of Spain’s merged savings banks or cajas are likely to succeed in raising capital through stock market offerings because of uncertainty about corporate governance and the value of property assets, according to Madrid investment bankers and senior commercial bank executives, the Financial Times reported. Banks and cajas have been given until Monday to tell the Bank of Spain how they intend to raise new capital.

Spain is redoubling its efforts to lower the country's chronically high unemployment rate and labor costs this month, under intense pressure from the European Union and international investors, The Wall Street Journal reported. The reform received new impetus from an EU agreement last week on measures to boost employment, competitiveness and budget discipline among euro-zone countries.

Spain's central bank said the country's lenders will need €15.15 billion ($21.07 billion) in new capital, but Moody's Investors Service published a far higher estimate that spooked markets and called into question the credibility of Spain's figures, The Wall Street Journal reported. The Bank of Spain's disclosure on Thursday, aimed at providing a new yardstick for the cleanup of the country's ailing banks and shoring up investor confidence, was overshadowed as Moody's downgraded its rating on Spanish government debt to Aa2 with a negative outlook, from Aa1 previously.

Klaus Regling, the chief executive of the European Financial Stability Facility (EFSF), has said he does not expect Portugal or Spain to ask for bailouts, the Irish Times reported on an Austrian state radio ORF story. “At the moment it looks like Ireland will be the only country to have tapped the EFSF,” Mr Regling said. “I don’t see any need at all any more for Spain” to take money, he said, adding that “Portugal still has to do some work”. While the EFSF would have sufficient funds for additional bailouts, giving funds “currently doesn’t look necessary”, he said.

Spain's central bank said the country's ailing savings banks are holding about €100 billion ($136.86 billion) in "potentially problematic" real-estate assets, the first time it has put a number on the extent of those holdings, The Wall Street Journal reported. The figure was disclosed as the head of the Bank of Spain voiced support for the government's plan to boost the solvency levels of those banks, known as cajas.

Despite complaints from Spain's ailing savings banks that reform efforts are moving too swiftly, the Spanish government is standing firm in its push to quickly convert the local institutions into traditional banks, according to people familiar with the matter, The Wall Street Journal reported. The government's new solvency decree will firm up a set of ambitious overhauls announced by Spanish Finance Minister Elena Salgado last month.