The credit ratings agency Moody's has downgraded 16 Spanish banks including Santander UK. It is the first British high street bank to be downgraded this year since the Euro crisis. The firm insists this has no impact on its UK business.
Shares in Bankia, Spain's fourth largest bank have tumbled as much as 26% today, El Mundo newspaper has reported. This follows a report that customers withdrew more than 1 billion euros from their accounts since the country's government took over the bank last week.
The newspaper reported that the newly appointed chairman, Jose Ignacio Goirigolzarri, informed a board meeting that customers had pulled out funds since the bank was taken over by the government.
Uncertainty over the final cost of Spain's banking reform has stoked investor fears that an expensive international bail-out could be on the cards, putting the survival of the euro zone at stake.
Santander UK has been quick to reassure customers that their money is in safe hands, despite being downgraded by Moody's ratings agency.
The decision by a credit rating agency to downgrade Santander UK is another demonstration that the troubles in the eurozone affect us all