ECB Rejects Bankia Recapitalization Plan: Report

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The European Central Bank has rejected Spain's proposed plan to recapitalize Bankia SA with government bonds, the Financial Times reported late Tuesday in its online edition, citing European officials. Spain had proposed putting 19 billion euros ($24 billion) in sovereign bonds into Bankia's parent company, which would then get swapped out for cash at the ECB's three-month refinancing window, FT reported. The ECB reportedly rejected the plan on the grounds it violated E.U. rules against central bank funding of governments.

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