These are nervous times in Europe. Shares in Bankia, a Spanish bank partly nationalized by the government last week, plunged 30% at one point yesterday following reports that customers had withdrawn more than $1.3 billion over the last week, reports Reuters. Bankia shares recovered some ground after the government and the bank denied that there had been unusual deposit activity, but stocks still closed down 14%.
Investors have good cause to be worried about Spanish banks, notes the Independent. Analysts believe the country's lenders are sitting on unrecognized bad property loans of up to $125 billion. In the latest blow to the financial sector, Moody's downgraded the credit status of 16 Spanish banks, sending stocks across the board plunging today as the market opened. The Ibex 35 index was off more than 2 points shortly after trading began, and banks were among the biggest losers, reports AP.