ECB vice president calls for quick action on Spanish banks

European Central Bank Vice President Vitor Constancio called Friday for quick action to recapitalise Spanish banks in order to calm jittery markets.

“Spanish banks have recapitalisation needs, therefore a solution must be found quickly to calm the markets,” Constancio said on the sidelines of a Portuguese parliamentary committee hearing.

Financial markets speculated Friday on a vast European bailout for Spain’s distressed banks as soon as this weekend, even as Madrid and other officials refused to confirm any such plan.

Spain’s Deputy Prime Minister Soraya Saenz de Santamaria said “no decisions have been taken of any kind” before the scale of the banks’ capital needs was known.

The International Monetary Fund was expected to soon complete and publish its review of the recapitalisation of Spanish banks, while the first of two independent audits of the banking sector was due on June 21.

A string of top European policymakers refused to comment on reports that the Eurogroup of finance ministers would hold a weekend telephone conference call at which Spain would seek rescues for its banks.