Spain do more to shore up banks

Joerg Asmussen, a European Central Bank board member, said on Thursday it was vital that Spain take added measures to shore up its banking sector. "It is urgent (that Spain) take more measures for its crisis-hit banking sector," Asmussen told the Handelsblatt daily, adding that Madrid must regain trust and launch an independent audit of Spanish banks. Asmussen also called on Spain to create a bad bank "to isolate distressed credit". Spain is expected to issue new rules on Friday forcing banks to boost their financial cushion against property assets, and announced Wednesday it would take control of the fourth-biggest listed bank, Bankia. In the interview, Asmussen said the ECB was in favour of making the bank's rescue funds, normally reserved for nations, available to the eurozone's banking sector, a position Germany opposes. Asmussen, a former advisor to German Finance Minister Wolfgang Schaeuble, said that the funds would only be distributed "under strict conditions" with "repayment guaranteed". For the moment, such a mechanism does not exist at the ECB, he regretted