Europe

Europe: Mkts are coming off. ECB was reported by FT to have rejected a deal to use govt debt to recapitalise Bankia. The Spanish govt was planning to use EUR19b in sovereign bonds for the recapitalization. The ECB was of the view this was in danger of violating a ban which disallows central banks to finance govt. Bankia was down 16% yesterday, after falling 13% on Monday. Spain's borrowing costs is of concern as they inch close to 7%, a range at which other nations seeked financial aid after.