MADRID (AP) - Conservative Spanish Prime Minister Mariano Rajoy insisted Monday that the country's banking sector would not need an international rescue as concern over the bailout of nationalized lender Bankia sent its stock price plummeting while Spain's borrowing costs soared.
"There will be no rescue of the Spanish banking sector," Rajoy told a press conference.
However, he added that the government had no choice but to bail out Bankia, which has been crippled by Spain's real estate slump.
"We took the bull by the horns because the alternative was collapse," said Rajoy, stressing that Bankia clients' savings were now safer than ever.
Brokers talk, while screens display Spain's Prime Minister Mariano Rajoy speech, at the Stock Exchange in Madrid, Monday, May 28, 2012. Shares in Spanish bank Bankia, one of the banks hardest hit by Spain's real estate collapse over the past four years, fell 28 per cent on opening in Madrid on Monday, the bank's first day back on the stock exchange following its announcement Friday that it would need Euro 19 billion ($23.8 billion) bailout to bolster its defenses.(AP Photo/Daniel Ochoa de Olza)