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Spain plans a partial state takeover of its weakest savings banks as it seeks to reassure investors a rescue will not weigh on its deficit.
A source familiar with the matter told Reuters on Friday the government would force debt-laden regional savings banks to become conventional banks and seek stock market listings to persuade skittish investors that they are good investments.
The state-backed bank restructuring fund (FROB) would then take stakes in the banks -- known as cajas -- that fail to attract private investment, the source said.
Up to now the FROB has functioned as a lender of last resort to the cajas.
Deputy Prime Minister Alfredo Perez Rubalcaba told reporters a new savings bank plan was coming soon and could include new laws, implying a reform of the FROB.