Spain's prime minister to present important bank clean-up measures

Spain's prime minister says the government will likely present important bank clean-up measures this week to clear up doubts about the solvency of the sector.

Mariano Rajoy gave no details but said he would not rule out lending or injecting public money into the sector if necessary.

His comments Monday came after El Pais newspaper said the government was preparing to help out troubled entity Bankia.

Spain's real estate bubble burst in 2008 saddling banks with enormous amounts of bad loans. The Bank of Spain says the sector has about 175 billion euro ($230 billion) in "problematic" holdings.

The government has forced banks to strengthen their finances by merging and setting aside some 50 billion euro ($66 billion) more in provisions this year to cover toxic assets.