By Simon Miller
Spanish banks will have to find another €30bn (£24bn) to cover their loan books, the government ordered this afternoon.
In addition, the banks' real estate assets will be seperated from their balance sheers and will be subjected to an independent audit.
The increase in provisions from 7% to 30% reflects growing concerns over Spanish banks' exposure in Spain's property crash and follows the part-nationalisation of Bankia this week.
"The government wants complete transparency, clarity is crucial to end any doubt about Spain's solvency," said economy minister Luis de Guindos.
Those banks that cannot meet the terms can get loans from the Spanish government although the deputy prime minister Soraya Saenz de Santamaria warned that the loans will be set with a 10% interest rate and no further state provision will be set aside for banking reform.
Such is the concern over the state of Spain's banks - the Bank of Spain estimates that 60%, some €180bn, of their property assets were 'problematic' - that the EU offered independent inspection of the banks, act as auditors and to extend deficit reduction targets.