Spain's banking sector crisis intensified this week after the government stepped-in to effectively nationalise one of its biggest lenders.

Spanish taxpayers now own around 45 % of Bankia, the country's fourth biggest bank, after an earlier loan to its parent company was converted into state-owned stock.

Prime minister Mariano Rajoy will detail formal plans to shore up the nation's banks. analysts expect him to demand Spain's banks raise another €35 billion – on top of the €54bn he called for in February – to protect depositors and investors against a potential collapse in property loans.

Spain's benchmark stock index, the ibex 35, posted solid 2 percent gains in Madrid today after the Bankia news, but sill sits within touching distance of a two-year low.

One Bankia customer Pilar Mejino was positive about the move, speaking in Spanish she said

"i don't think it's strange, given the delicacy of the situation, i think the best thing was for them to do this. i personally prefer it to be nationalised than for them to have to give it a load of millions of Euros."

The demands will likely pile further pressure on a sector already struggling under the weight of nearly €200bn in bad real estate loans and an economy mired in recession and decades-high unemployment.

I am Ann Salter,thank you for watching,for the very latest on this story and other news,go to our website ibtimes.co.uk

Written and presented by Ann Salter