Spain Formally Seeks Aid as Debt-Seniority Debate Drags On

Spain formally requested a bailout for its banks as discussions continued as to whether the loan of as much as 100 billion euros ($125 billion) would take precedence over other debts in the event of default.

Doubts over seniority will be resolved within weeks, Deputy Economy Minister Fernando Jimenez Latorre said today, after European officials played down the importance of the issue last week. Euro-area finance ministers still have to decide whether the aid will come from Europe’s temporary rescue fund or its successor, which gives its creditors preferred status, the Economy Ministry in Madrid said.