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global financial crisis


The global financial crisis has resulted in many changes on different markets. For instance, as you probably remember, many large banking organizations have collapsed and their collapse had serious consequences on the financial sector. Numerous elements of this sector that were “reserved” for the big players became available to the ordinary people and on top of that, they don’t have to leave their homes in order to get involved in this activity. Almost every type of trading is now available on the Internet. The financial industry has followed the process of digitalization just like most industries.

Today, any individual with a computer or a laptop and access to the Internet can start trading no matter where they are. Even though there are many different types of trading, the fact is that CFD trading is among the most popular ones. The reason is simple – any person that is willing to learn more about this market and procedure can earn a good amount of money in a relatively short period of time. In addition, if you are able to leave emotions out of this activity the success is almost guaranteed.

On top of that, there are many great companies offering CFD trading like CMC markets that will help you with this process. Now let’s see how you can get the most from this activity.

If we compare contracts for difference or CFD traders to any other type of traders we will notice that CFD traders don’t have to possess some special talents or skills. The things that are important for their success are good training, realistic goals, motivation and having everything under control.

Keep in mind that this financial sector is constantly changing and there are some rapid movements of huge amounts of money that are transferred from one account to another on a daily basis. Obviously, this means that there is a good chance to make good profit from these transactions, but chances are that you will lose huge amounts of money too.

However, this is only possible if you are not sticking to your plan and strategy. This is the reason why so many experts say that good training and preparing goals and plans is crucial before you even start with this activity. There are a huge number of people who think that reading a few articles on the Internet will make them a successful CFD trader, but this is wrong. You should never invest any money on a market that you don’t understand completely. Take some time to check specialized training blogs and sites where you will learn how to trade and how to monitor and analyze the future movements of CFD markets.

It is also a good idea to join forums and discussion boards or any other platform where you can discuss and get tips from CFD traders that have experience and success. The good news is that there are many traders like this who are willing to share their experience.

Finally, it is also a good idea to try the demo account from CFD trading platforms. The most successful CFD trading service providers offer free demo accounts for their users. This is excellent for beginner users because they can see how the trading works without investing real money.

China’s economic growth slowed to 6.9% in Q3 of 2015, the weakest rate since the global financial crisis.

The year-on-year growth rate is also below the government’s 7% target.

Though slightly above expectations, the data is expected to raise pressure on policymakers to step up monetary policy to stem the slowdown.

China’s economy has been hit by extreme stock market volatility over the summer and weak economic data, causing concern on markets around the world.

Most analysts were expecting growth figures of 6.8% for Q3 of 2015.

The latest growth figure comes after a slew of disappointing data out of China. Earlier in the month, manufacturing data suggested the sector continued to contract for September.China economic growth

Imports saw a sharp fall for the past month while inflation eased by more than expected, adding to fears of a rapid slowdown in the world’s second largest economy.

China has been attempting to shift from an export-led economy to a consumer and services-led one.

Beijing set an official growth target of “about 7%” for the overall year but PM Li Keqiang said a lower growth rate was also acceptable, as long as enough new jobs were created.

Analysts say the steep fall in imports suggests domestic demand is not as strong as the government would have hoped.

The slowdown comes despite repeated interest rate cuts and other stimulus measures introduced by Beijing.

They could be seen in the industrial production data, in heavy industry and other sectors.

In Q2 of 2015, growth did beat expectations, coming in at 7% from the previous year, matching growth in the first three months of the year.

Economists are, however, continuing to call for more government action, as volatility in the stock markets sparks concerns of financial turmoil and potential social unrest.


Ever since the global financial crisis hit in 2007, the housing market in the UK has been in somewhat of a slump. As most people didn’t have much cash lying around, they chose to stay put in an attempt to make themselves more secure. However, things are looking up in 2015, and so more people are buying and renting new properties now than at any point in the last seven years. Does that mean estate agencies are once again making a mint from the housing market? We did some research in an attempt to find out. Of course, one of the main benefits of a better financial climate is that property prices are climbing steadily. That usually means more people are willing to buy, sell, or rent.

Home Buying

When it comes to helping people find their ideal property, estate agents tend to make a decent commission. As more people are looking to make a purchase this year, business owners in that industry are rubbing their hands together. While they only take a small percentage from the sale of a home, that could be thousands of pounds depending on the price. Some smaller firms simply add their fee onto any sales, but they are also doing pretty well at the current time. One of the country’s leading estate agency groups recently announced their profits for the first quarter of 2015 look set the break all previous records.

Housing Markets

Alan Cleaver

Home Leasing

When finding out a little more about Hamptons International, we discovered that rental rates were also soaring this year. A lot of people simply cannot afford to purchase a property because their wages are too low. While most high street banks are more enthusiastic about lending money these days, you still have to meet certain criteria for a mortgage. That has helped to boost the rental market considerably since the end of 2014. The average rental price in the UK now stands at just over £500 per month. However, people who want to live in the most desirable areas now have to pay a lot more than that.

Home Selling

It stands to reason that most estate agencies will be making more money from the sale of homes this year. If more people are buying, it will encourage more people to sell. When there are more buyers than sellers in the marketplace, prices tend to rise pretty quickly. That means estate agency firms make an even more substantial commission when the sale finally goes through. If you were looking to start a business in that field in the near future, now is the best time to get on-board. Like it or not, there is no way of knowing how things will progress moving forward into 2016.

To answer the question posed in the title of this post, yes, estate agencies are making high profits from the housing markets this year. While it is impossible to work out how things will change over the coming months, most people in the industry are very positive about the future. So, maybe now is the best time to get involved?

The central bank of Australia has cut its benchmark interest rate to a new record low, in an attempt to spur a fresh wave of economic growth.

The Reserve Bank of Australia (RBA) cut its key rate to 2.5% from 2.75%.

Last week, the government cut its growth forecasts and warned that unemployment in the country could rise amid slowing growth.

The rate cut comes just days after PM Kevin Rudd called a general election for September 7.

The state of the economy is expected to be a key poll issue, along with asylum and climate change.

Treasurer Chris Bowen welcomed the move, saying that “the fact is that now, under Labor, interest rates are at record lows”.

“This cut means that a family with a standard mortgage of A$300,000 [$269,500] will now be paying around $A500 less a month and A$6,000 less in annual payments than when the Coalition was last in office,” Chris Bowen was quoted as saying by the Australian Broadcasting Corporation (ABC).

The Reserve Bank of Australia cut its key rate to 2.5 percent from 2.75 percent

The Reserve Bank of Australia cut its key rate to 2.5 percent from 2.75 percent

However, the opposition targeted the Labor party government’s economic policies.

“There is no doubt that a reduction in interest rates is a good thing, but you have to ask yourself why are interest rates likely to be cut,” opposition Leader Tony Abbott was quoted as saying by the ABC, ahead of the rate decision.

“If interest rates go down, it is because this government is presiding over an economy which is in much more trouble than government has previously been prepared to admit.”

Australia’s economic growth over the past few years has been powered mainly by the success of its resources sector.

Demand from countries such as China resulted in a commodities boom, which helped the country sustain its growth even through the global financial crisis.

However growth in those economies has slowed recently, driving down demand for commodities as well as their prices.

That led to the government lowering its forecast for growth. On Friday, it said that it now expected the economy to grow by 2.5% in the current financial year, down from its previous projection of 2.75%.

Analysts said that the slowdown in growth is likely to prompt the central bank to lower borrowing costs even further in an attempt to ease the burden on businesses and consumers.

“The economy’s probably slowed down a little bit more than they would have liked,” said Michael Turner a strategist with RBC Capital Markets.

“So they’re kind of playing catch-up a tiny bit, you would suggest.”

Michael Turner added that he expects the central bank to cut rates by another 25 basis points in the last quarter of the year.

Dow Jones and Standard & Poor’s 500 share indexes have set new all-time highs on Wall Street.

Now the stock markets are returning to levels not seen since before the global financial crisis.

Dow Jones and Standard & Poor's 500 share indexes have set new all-time highs on Wall Street

Dow Jones and Standard & Poor’s 500 share indexes have set new all-time highs on Wall Street

Dow Jones rose 89 points, to close at 14,662, after an earlier intraday high of about 14,684.

S&P 500 closed at a record high of 1,570, suggesting investors are regaining confidence in the US economy.

Dow Jones has more than doubled in value since it plummeted to less than 6,550 points in the depth of the crisis in March 2009.

Tuesday’s rally came after a US Department of Commerce report showed new orders for manufactured goods rose 3% in February, topping predictions.

Also, carmakers General Motors, Ford and Chrysler reported strong US monthly sales performances.

General Motors said “a strengthening economy and new products” were factors behind the result.

Asian stock markets have continued a global rally after New York’s main Dow Jones share index hit a historical record high.

Equity markets in Asia, the US and Europe have been buoyed by central bank attempts to revive economic growth by pumping cash into the financial system.

Analysts said that this has helped ease fears of continuing political problems and slower corporate profit growth.

In Asia on Wednesday, the main indexes in Japan and Australia hit their highest levels since September 2008.

Japan’s Nikkei was 1.1% higher in early trading while Australian shares were up 0.9%. Shares in Hong Kong, Shanghai and Singapore also posted gains.

The dollar eased 0.2% against a basket of key currencies while copper and crude oil prices rose.

The rally on Wall Street means the main US indexes have erased the losses brought on by the global financial crisis.

Dow Jones closed at 14,256 after investors were buoyed by signs of recovery in the US housing market in recent months, and data showing growth in the services sector.

The share index ended the day more than double its low of 6,547 in March 2009.

London’s FTSE 100 closed at a five-year high on Tuesday.

Analysts said sentiment was being boosted mainly because of the stimulus programs being conducted by the US, Europe and Japan.

Asian stock markets have continued a global rally after New York's main Dow Jones share index hit a historical record high

Asian stock markets have continued a global rally after New York’s main Dow Jones share index hit a historical record high

In the US, Federal Reserve chairman Ben Bernanke has engaged in a campaign of massive bond-buying while keeping interest rates at a record low to help support the world’s largest economy after the global financial crisis in 2008.

The program known as quantitative easing or QE3, is in its third phase, and has been made open ended.

“To be sure, it was Bernanke’s reassurance, at last week’s congressional testimonies on monetary policy, to keep QE3 on its present course that turned a worried stock market into a record high,” said analysts at DBS Bank in Singapore.

The European Central Bank and the Bank of Japan have also taken steps to boost liquidity.

However, despite the positive sentiment on the markets analysts said there were risks on the horizon.

China’s move to curb high property prices, the impact of the US spending cuts as well uncertainty after the elections in Italy could still weigh on investors.

These concerns, however, are for now being overshadowed by the notion that central banks will continue to support the fragile global economic recovery.

“That’s fantastic testament to the power of easy money, in the face of doubts about the US economy now that fiscal spending is being cut back,” said Kit Juckes, from Societe Generale.

The European Central Bank, the Bank of Japan and the Bank of England will hold their policy meetings on Thursday.

Most analysts expect the three central banks to continue their policies aimed at spurring growth in their economies.

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People in the Republic of Cyprus have begun voting for a new president as centre-right leader Nicos Anastasiades has a 15-point lead in the polls over his main rival, leftist Stavros Malas.

However, Nicos Anastasiades is not predicted to win more than 50% of the vote, which would be required to avoid a run-off vote on 24 February.

The election has been dominated by the global financial crisis. In June, Cyprus became the fifth member of the eurozone to request a bailout.

Shut out of the international financial markets, the cash-strapped government was forced to seek financial help after Cypriot banks suffered huge losses as a result of the restructuring of Greece’s sovereign debt.

It has requested some 17 billion euros ($22.7 billion) from the EU and IMF – a small amount in comparison with other rescues but roughly equal to Cyprus’s gross domestic product.

Negotiations have been stalled by disagreement between the EU, IMF and the outgoing President Demetris Christofias, leader of the communist Akel party, over how to address the country’s debt and who should pay.

Some investors fear that Cyprus will never be able to repay its debt, and many question its commitment to fighting money laundering and its strong links to Russia, which extended a 2.5 billion-euro loan in late 2011.

“Everything is at stake, like it has never been before,” Kyriakos Iacovides, publisher of the Cyprus Mail newspaper, told the Reuters news agency.

“The country must be rebuilt. Cyprus must be rehabilitated in the EU. We need a strong leadership to rebuild the country.”

Centre-right leader Nicos Anastasiades has a 15-point lead in the polls over his main rival, leftist Stavros Malas

Centre-right leader Nicos Anastasiades has a 15-point lead in the polls over his main rival, leftist Stavros Malas

Nicos Anastasiades, the head of the centre-right Democratic Rally (DISY) party, has promised a quick agreement on the bailout. He is close to Germany’s Chancellor Angela Merkel, who expressed support for his bid while visiting Cyprus in January.

According to the latest polls, his closest rival among the 10 other candidates is Stavros Malas, who is backed by Akel, closely followed by Giorgos Lillikas, an independent.

More than 545,000 people are eligible to vote in Cyprus. Another 14,000 Cypriots can vote at embassies abroad.

Voting is scheduled to end at 18:00 and the final result is expected to be announced at around 20:30.

The new president will also face pressure to help reunite the island, divided between Greek and Turkish communities since 1974.

A recent huge natural gas find has given some hope to the country, but with unemployment soaring and recession biting, whoever wins this election will face a daunting task.

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Royal Bank of Scotland (RBS) is expected to be fined a total of about £400 million ($625 million) by UK and US regulators as a result of the LIBOR scandal.

The head of RBS’s investment banking arm since 2008, John Hourican, is also expected to step down.

However, there is no suggestion he was involved in the scandal.

RBS is accused of colluding with other banks to rig LIBOR rates during the global financial crisis. Barclays and UBS have already received fines.

Business Secretary Vince Cable said the UK government had made it clear to RBS that the fines should be paid from staff bonuses, saying that neither taxpayers nor bank customers should bear the cost.

The government has an 81% stake in RBS following the part-nationalization of the bank during the financial crisis.

“The problem is that these are global banks and if they’ve committed breaches of the law in the US they have to be punished accordingly,” said Vince Cable.

“It is absolutely galling for UK taxpayers to be asked to stump up for it.”

But he acknowledged that the government could not force RBS to act, despite its majority stake.

RBS is expected to be fined a total of about $625 million by UK and US regulators as a result of the LIBOR scandal

RBS is expected to be fined a total of about $625 million by UK and US regulators as a result of the LIBOR scandal

In a statement released on Wednesday morning, RBS said it was still in “late-stage settlement discussions” with US and UK authorities over “potential settlements”.

“Although the settlements remain to be agreed, RBS expects they will include the payment of significant penalties as well as certain other sanctions,” the bank said.

Those discussions are taking place with the Financial Services Authority in the UK, the US Commodity Futures Trading Commission and the US Department of Justice.

The greater proportion of the fines are expected to be imposed by the US authorities.

Swiss bank UBS admitted to wire fraud charges against its Tokyo office as part of its £940m settlement with international regulators in December.

Barclays, the first bank to admit to its role in rigging LIBOR, paid a total of £290 million ($460 million).

John Hourican, who earned £3.5 million ($5.5 million) for last year’s work, is expected to lose his bonus for 2012 along with his position as head of RBS’s investment bank. He is also expected to forego £4 million ($6 million) of bonuses from previous years, in order to help pay the expected fines.

John Hourican is the highest profile casualty at the bank since it emerged last year that dozens of bankers had willfully manipulated the key interest rate.

LIBOR, a daily average of borrowing costs announced by a panel of London-based banks, is used to calculate payments on hundreds of trillions of dollars-worth of financial contracts.

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The US Federal Reserve released transcripts from its 2007 meetings have shown it may have underestimated the looming global financial crisis.

The documents suggested Fed Governor Ben Bernanke wanted to hold off from addressing rising panic in the markets.

Ben Bernanke said in December 2007 that he did not “expect insolvency or near insolvency among major financial institutions”.

Yet many US banks and other financial firms had to be rescued in 2008.

With most of the country’s major lenders discovering billion-dollar losses linked to bad mortgage debt as the US housing market collapsed, investment banks such as Bear Stearns needed government funds ahead of being sold off cheaply, while another, Lehman Brothers, was ultimately closed down.

In 2008, the US government also had to bailout the federal mortgage agencies, Fannie Mae and Freddie Mac.

The US Federal Reserve released transcripts from its 2007 meetings have shown it may have underestimated the looming global financial crisis

The US Federal Reserve released transcripts from its 2007 meetings have shown it may have underestimated the looming global financial crisis

Although the financial crisis started as a result of the sharp downturn in the country’s housing market, it quickly spread around the world as US mortgage debt had been repackaged and sold to banks and other financial institutions around the globe.

The released Fed documents from 2007 also suggest current US Treasury Secretary Timothy Geithner underestimated the crisis.

Timothy Geithner, who at the time was president of the New York Federal Reserve Bank, said in August 2007: “We have no indication that the major, more diversified institutions are facing any funding pressure.”

Meanwhile in October 2007 Janet Yellen, another member of the Fed’s most senior committee, the Federal Open Market Committee, said: “I think the most likely outcome is that the economy will move forward toward a soft landing.”

The Fed did, however, take some action in 2007 to try to resolve the growing problems in the financial sector, cutting US interest rates three times.

In September 2007 it reduced its core rate to 4.75% from 5.25%, where it had been for more than a year. Two other rate cuts followed by the end of the year, before numerous further reductions in 2008.

And Janet Yellen said in December that “the possibilities of a credit crunch developing and of the economy slipping into a recession seem all too real”.

US rates currently stand at between 0% and 0.25%, where they have been since December 2008.

Thousands of Argentineans have taken to the streets of Buenos Aires in protest at the government of Cristina Fernandez de Kirchner.

Opposition activists used social networks to mobilize the march, which they said was one of the biggest anti-government protests in a decade.

Those gathered said they were angry at rising inflation, high levels of crime and high-profile corruption cases.

President Cristina Fernandez de Kirchner was re-elected by a landslide to a second term in 2011.

Her approval ratings have since dropped and protests against some of her policies have mounted.

Official figures say inflation is at 12%, but analysts say it is probably much higher.

Thousands of Argentineans have taken to the streets of Buenos Aires in protest at the government of Cristina Fernandez de Kirchner

Thousands of Argentineans have taken to the streets of Buenos Aires in protest at the government of Cristina Fernandez de Kirchner

The International Monetary Fund warned Argentina in September that unless it produced reliable growth and inflation data by December, it could face sanctions.

Protesters also voiced their objections to restrictions introduced last year, and further sharpened this year, on the purchase of dollars, which have made it harder for Argentines worried about inflation to trade in their currency.

The government says the slowdown of the Argentine economy is the fault of the global financial crisis rather than its policies.

Supporters of President Cristina Fernandez de Kirchner say the protests are driven by people from the middle and upper class worried about losing their privileges.

They point to policies supporting the poor, such as cash payments to the unemployed, as the real achievements of her government.

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Lithuania is voting in the second round of national elections, with budget cuts and joining the euro seen as key issues.

Polls opened at 07:00 with half the seats being contested.

Two centre left parties, the Labour Party and the Social Democrats, finished first and second in the first round on 14 October.

PM Andrius Kubilius’ governing conservatives, unpopular for cutting pensions and public wages, came third.

Having won 34 seats in the first round, Labour and the Social Democrats hope to win enough of the 67 seats available on Sunday to allow them to form a coalition government.

Lithuania’s 3.3 million inhabitants face an unemployment rate of 13% and declining living standards, as well as high energy costs since the country closed its Soviet-era nuclear power plant in 2009.

They voted against government plans to build a new nuclear power station – seen as a way of cutting dependence on imported Russian energy – in a referendum held at the same time as the first round of elections.

Opposition parties had questioned the plant’s affordability. They have promised to improve the ex-Soviet state’s strained relations with Russia, still Lithuania’s biggest trade partner.

The populist Labour Party, founded by Russian-born millionaire Victor Uspaskich, won 18 seats in the first round of voting, while the Social Democrats won 16 seats and the ruling Homeland Union 13.

Led by former finance minister Algirdas Butkevicius, the Social Democrats have promised to raise the minimum wage, make the rich pay more tax and put back euro entry until 2015, a year later than the government hopes.

But analysts say there will be little room for fiscal manoeuvre. Among the EU’s poorest countries, the Baltic state needs to borrow 7% of its GDP – some 7.6 billion litas – next year to refinance debt and fund the deficit.

Andrius Kubilius came to power in 2008, just as the global financial crisis was bringing a dramatic end to an extended Lithuanian boom fuelled by cheap Scandinavian credit.

He staved off national bankruptcy with a drastic austerity programme as economic output dropped by 15%, unemployment climbed and thousands of young people emigrated in search of work.

The budget deficit has since been tamed and GDP reached growth of 5.8%.

Lithuania’s approach won praise from other governments and the International Monetary Fund, but analysts say the rebound came too late to translate into a political revival for the conservatives.

Delaying euro entry means the country could run a bigger deficit than euro accession rules permit.



The World Bank has lowered its growth forecast for China citing weak demand for its exports and lower investment growth.

The bank said it expects China’s economy to grow by 7.7% this year, down from its projection of 8.2% in May.

China’s exports have been hurt by economic problems in the eurozone and the US, two of its biggest markets.

Meanwhile, policymakers have found it tough to boost domestic demand enough to offset the decline in foreign sales.

“China’s slowdown this year has been significant, and some fear it could still accelerate,” the bank said in its latest report.

After the global financial crisis in 2008 – 2009, China unveiled a slew of stimulus measures, including record lending by state-owned banks, to maintain a high rate of growth.

While the measures helped it sustain growth, they also resulted in a sharp increase in property prices in the country, raising fears about asset bubbles being formed.

Prompted by those fears, policymakers have been trying to curb lending in recent times.

While the moves have helped to keep property prices in check, there have been concerns that they may have hurt China’s growth.

However, the bank said that despite the recent slowdown in the economy, Beijing may be prompted to hold back on any big stimulus measures, not least because any such move may result in property prices rising again.

“Economic momentum is expected to be weak during the coming months with limited policy easing, a property market correction, and faltering external demands,” the bank said.

It added that the role of investment in China’s growth had also reduced over the past year, indicating that Beijing may be trying to rebalance its economy.

“In 2011, China’s consumption contributed more to gross domestic product [GDP] growth than investments, for the first time since records of GDP began in 1952,” it said.

“Some observers see this as the start of a trend in domestic rebalancing, and associate this with a more permanent growth slowdown in China.”

However, it said that the central government had accelerated approvals of its investment projects which could “support the recovery in investment and activity in the quarters to come”.

The bank also lowered its forecast for East Asia in the wake of a slowdown in exports from the region.

It said growth in East Asia, which includes countries such as Indonesia, Malaysia, Thailand and Philippines, will decline a full percentage point to 7.2% this year.

However, it added that strong domestic consumption in the region was likely to boost its economic recovery next year.

“Weaker demand for East Asia’s exports is slowing the regional economy,” said Pamela Cox, World Bank East Asia and Pacific Regional Vice President.

“But compared to other parts of the world, it’s still growing strongly, and thriving domestic demand will enable the region’s economy to bounce back to 7.6% [growth] next year.”


According an independent audit, Spain’s banks will need an injection of 59.3 billion euros ($76.3 billion) to survive a serious downturn.

The amount is broadly in line with market expectations of 60 billion euros, and follows so-called stress tests of 14 Spanish lenders.

Much of the money is expected to come from the eurozone rescue funds, the current EFSF and the future ESM.

Spain said in July that it would request eurozone support for its banks.

The Spanish banking sector has been in difficulty since the global financial crisis of 2008, and the subsequent bursting of the country’s property bubble and deep recession.

Spain's banks will need an injection of 59.3 billion euros to survive a serious downturn

Spain’s banks will need an injection of 59.3 billion euros to survive a serious downturn

The European Commission welcomed the announcement, saying in a statement that it “is a major step in implementing the financial-assistance programme and towards strengthening the viability of, and confidence in, the Spanish banking sector”.

It added: “The necessary state aid provided to Spanish banks will be determined in the coming months.”

The Commission also said that it expected the first Spanish banks to start receiving the loans “by November.”

Christine Lagarde, managing director of the International Monetary Fund, praised the independent valuation of Spain’s banks, saying it had been “thorough and transparent”.

She added: “Public funding of the banks’ actual capital needs, which are expected to be lower than the amounts identified in the stress tests, can be financed comfortably under the recapitalization programme supported by Spain’s European partners.”

The audit calculation that Spain’s banks will need 59.3 billion euros is a worst-case scenario, and does not take into account any future plans by the lenders themselves to raise their own capital.

The country’s economy minister Fernando Jimenez Latorre indicated that it may need to borrow about 40 billion from the eurozone rescue funds.

Bankia was found to be the bank most in need of additional capital, requiring 24.7 billion euros. It was followed by Catalunya Bank (10.8 billion euros), Novagalicia (7.2 billion euros), Banco de Valencia (3.5 billion euros), Banco Popular (3.2 billion euros), Banco Mare Nostrum (2.2 billion euros), and Ibercaja-Liberbank-Caja (2.1 billion euros).

Seven Spanish banks have no need for extra capital – Santander, BBVA, Caixabank, Kutxabank, Sabadell, Bankinter, and Unicaja.

The audit was also based on a number of assumptions, including that Spain’s economy will contract by 6.5% between 2012 and 2014.

The Open Europe think tank suggested many of these were overly optimistic, however.

“These tests do look to be more intense than the previous ones but ultimately the optimistic assumptions do instantly raise questions over their credibility,” the group said.

“The prediction that unemployment will peak at 27.2% seems optimistic given that there is plenty more austerity and internal devaluation to come while the structural labor market reforms are yet to take effect.”

It added that a worsening economic situation would also increase the number of loans which are defaulted on and hit the value of the foreclosed properties which banks own.

The bigger question remains whether the Spanish government will have to follow Greece, Portugal and the Republic of Ireland and request a full international bailout, involving loans that have to be paid off by the state, as well as close monitoring of its economy by its international creditors.

While Madrid continues to publicly deny this, the markets consider it only a matter of time.

On Thursday, the Spanish government announced its latest austerity budget. Against a backdrop of violent protests, it outlined new spending cuts, but protected pensions.

Spain is struggling with a shrinking economy and 25% unemployment.

Comments from its central bank earlier this week indicated that the country’s recession deepened in the past three months.

As tax revenues fall and benefits payments rise in a recession, this will make it even harder for Spain to get its finances under control.