Spain to seek bank bailout within days

Spain will present its official request for an EU bailout for its banks over the weekend but failed to convince all eurozone countries that the loan should not have preferential creditor status — a prospect blamed for the country’s euro-era record borrowing costs.

While the head of the EFSF bailout fund, Klaus Regling, said finance ministers “may look at this again”, IMF chief Christine Lagarde warned that it was important to break the link between the banks and the sovereign.

She delivered a stern message to the ministers in Luxembourg last night that the eurozone was under acute stress with the monetary system itself under question.