Spain’s share prices have dropped to 2.55 percent, the lowest level the country has witnessed in more than three years.
Madrid’s main stock market, the IBEX-35, tumbled 179.10 points to 6,831.90 on Wednesday. This is the lowest close since March 2009 and brought the cumulative losses so far this year to more than 20 percent.
The richest eurozone bank, Santander, dropped 3.31 percent to 4.564 euros and its rival Banco Bilbao Vizcaya Argentaria (BBVA) fell 3.33 percent to 4.936 euros while Bankia skidded 5.13 percent to 2.46 euros.
Market analysts attribute the plunge to investor distrust of the country’s overextended banking sector.
Central Bank statistics show that the proportion of bad loans, those at least three months in arrears, hit an 18-year high in February of 8.15 percent of total credit extended which is the highest since 1994.
Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, destroying millions of jobs.
Europe plunged into deep financial crisis in 2008, which has continued to intensify in recent months.