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The European Union hasn't received a request from Cyprus for help with recapitalizing its banks, but it is ready to act if one were to be made, a spokesman for the European Commission said later on Monday. Earlier Cyprus's finance minister, Vasos Shiarly, said the country's need for an international bailout stemming from a looming bank-recapitalization plan was "exceptionally urgent" and would need to be resolved within a matter of days.
Spain itself was urged to review its plan to create a band bank for its toxic property market assets by the European Central Bank (ECB) on Monday which suggested the current proposals may not go far enough.
As part of a new bank clean-up plan, the Spanish government last month told local banks to set aside additional funds to protect against losses and to transfer troubled property assets from their own balance sheets to external vehicles.
The government wants the banks to recognize losses associated with such assets and place them in the hands of professional property managers to speed their liquidation.
“It remains unclear...whether the envisaged framework is sufficient to achieve an effective separation of the risks of banks," the ECB said in an opinion concerning Spain's reforms.
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