Spain sets up €50 billion rescue fund

Madrid on Tuesday said it would establish a rescue fund to buy high-quality assets from its banking industry, hampered by a downturn in the country's housing market and the global turmoil.

Jose Luis Rodriguez Zapatero, the Spanish prime minister, said that the aim of the rescue fund was to unblock Spanish credit markets and that it would be disbanded once markets normalise.

The authorities will inject €30 billion ($41 billion) into the fund initially, though this could be extended to €50 bill