Chinese investors including the country's sovereign wealth fund may inject $13 billion into Spanish banks, a government source said on Wednesday after Spain's premier met financial authorities in Beijing. There was no immediate comment from Beijing and it was not clear what terms would make the risk attractive to China, which has invested cautiously in overseas financial markets in the last couple of years partly to avoid any criticism it is squandering reserves. Concerns about delays in recapitalising Spain's ailing savings banks -- heavily exposed to bad loans from a burst property bubble -- have overshadowed the euro zone state's efforts to convince markets it will not need a bailout. According to official estimates the savings banks -- which are known as cajas and hold about half the deposits in Spain's financial system -- need about 15 billion euros in fresh funding to meet strict new financial targets.
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