Germany and EU officials urgently explore ways to rescue Spain’s banks

Germany and European Union officials are urgently exploring ways to rescue Spain’s debt-stricken banks, although Madrid has not yet requested assistance and is resisting being placed under international supervision.

Spain, the eurozone’s fourth biggest economy, said it was effectively losing access to credit markets due to prohibitive borrowing costs and appealed to European partners to help revive its banks.

The European Central Bank dashed investors’ hopes of an easing of monetary policy or another flood of cheap liquidity for banks despite saying the eurozone money market has again become “dysfunctional”.