United States stock futures popped on Monday following some positive news out of the euro zone. European shares rallied and the euro climbed to a six-week high against the dollar after Spain formally requested financial assistance for its banking system.
Spain asked euro-zone finance ministers for 39.5 billion euros ($51.46 billion) to recapitalize its struggling banking sector. It’s important not to confuse this funding with a full-blown bailout, which many had been expecting Spain to request. Spain is asking for money to transfer straight to the balance sheets of four nationalized banks — Bankia, Catalunya Bank, NCG Banco, and Banco de Valencia — and the so-called “bad bank,” where Spain is quarantining toxic assets.
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Finance ministers are expected to approve the funding on Monday at a regularly-scheduled monthly meeting in Brussels.
Spain has been a major downside risk since 2008 when the crisis began in full swing…