The Spanish Government has agreed to set up a 30 billion Euro fund to buy bank assets, while the Russian government has also declared that it is lending its banks-$37 billion to stem financial crisis. The Spanish Government had decided to lend the banks the funds in order spur lending. The main reason behind this move is to promote the effective functioning of the Spanish Credit markets. The funds might be increased to 50 billion euros to buy the assets and will probably shut down the markets until market conditions stabilize. It is sad to note that Spain’s economy is facing its first recession in 15 years. Spain is also proposing an increase in guarantee for deposits to 100,000 euros.

The Russian government on the other hand has agreed to inject the sum of $37 billion in long term subordinated loans into state-controlled banks in a measure to stem the financial losses witnessed in the Russian financial sector; including the Russian stock exchange. The Russian president has announced the loan after an emergency meeting with the executives of two of the biggest financial institutions in other to stabilize the large scale financial crises. Two of the biggest state owned banks-Sberbank and VTB are said to be at the fore-front of the largesse announced by the Russian government. Russian investors have expressed optimism that the loans offered by the government will provide the desired long-term liquidity in the banking system, while reviving the frozen money markets. The Russian stocks is said to be witnessing its steepest loss in its history.

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