A woman walks past defaced Bankia sign in Madrid

BBC

Eurozone finance ministers are holding a conference call to discuss a possible bailout for Spain's struggling banks.

According to the BBC, the International Monetary Fund (IMF) estimates that Spain's "vulnerable" banks need a cash injection of at least 40bn euros ($50bn; £32bn).

News agency reports suggest that a figure closer to 100bn euros could be under consideration.

Spain is under pressure to request help, but it has denied reports that it is about to do so.

The IMF said on Friday that a "stress test" showed Spain's financial sector was well managed but urged "decisive action".

"It is critical that the authorities continue to take decision action to address the weaker institutions and restore market confidence in Spanish banks," the report said.

It warned that delays would make the economic downturn worse and "damage stability more broadly".

In an interview on Portuguese radio, European Central Bank Vice-President Vitor Constancio said: "It is expected that Spain will formulate a request for aid exclusively for banks recapitalisation.

Jean-Claude Juncker, who chairs the Eurogroup of finance ministers, said: "The solution must come quickly."

Correspondents say Spain is being urged by Brussels and Germany to act ahead of next weekend's elections in Greece, which has led to fears of a break-up of the eurozone.

"If Spain feels overwhelmed by its financial needs, it should use the instruments which have been created for that," Jens Weidmann, the head of the German central bank, said in an interview with a German magazine.

However on Saturday morning, the Spanish government restated its position that it does not need outside help to shore up its banks.

"There has been no change," a spokeswoman from the economy ministry in Madrid told AFP news agency.
Bad loans

Spanish Prime Minister Mariano Rajoy has insisted that any decision will come after the results of two independent audits of the Spanish banking system, which are due out within two weeks.

The audits will produce a figure of how much money, in total, is needed to prop-up Spain's banking sector.

Major banks are struggling to deal with toxic property loans. The country's fourth-largest lender, Bankia, recently asked for a total of 23.5bn euros (£19bn) to help deal with losses on loans that cannot be repaid.