Spain moves to bailout its banks

MADRID, Oct. 8 (UPI) -- Spanish Prime Minister Jose Luis Rodriguez Zapatero said the government would purchase up to $68.5 billion of bank assets to keep credit systems flowing.

Unlike the $700 billion U.S. bailout plan, Spain would buy only healthy assets from banks, The New York Times reported Wednesday.

To stem depositor panic, Zapatero said the government would raise bank deposit insurance to $137,000 per account.

Several European countries followed Ireland's lead from last week in insuring bank deposits, some with complaints that Ireland had given its banks and unfair advantage.

"It's important that European companies don't suffer competitive disadvantages," Jorg Asmussen, Germany's deputy finance minister said Wednesday at gathering of finance ministers in Luxembourg.