By Louise Armitstead, Chief business correspondent
8:19PM BST 31 May 2012
The Bank of Spain said €66.2bn was withdrawn in March alone – the fastest rate since records began in 1990 – taking the total to €97bn for the first quarter.
Experts warned that the chaotic state-rescue of Bankia is likely to have speeded up the capital flight, compounding the already critical instability of the banks.
Foreign investors have also rapidly withdrawn their support for Spanish government funding.
According to figures from Barclays Capital, foreigners accounted for just 30pc of the holders of Spanish sovereign debt in March, down from 40pc at the same time last year.
In a bid to plug the draining confidence, Spain on Friday launched a diplomatic offensive in the US and Germany in a bid to win support for its banks but still stave off a bail-out.
Soraya Saenz de Santamaria, Spain's deputy prime minister, was despatched across the Atlantic for crisis talks with Tim Geitner, the US Treasury secretary, and Christine Lagarde, head of the International Monetary Fund (IMF). Finance minister, Luis de Guindos, was sent to Germany to meet his counterpart Wolfgang Schaeuble, sometimes seen as the eurozone's paymaster
Traders, who have dumped Spanish stocks and bonds in recent days, were hopeful for international support. However, last night a spokesman for the IMF told reporters: "The IMF is not drawing up plans that involve financial assistance for Spain." He said the meeting was merely to "discuss recent economic developments in Spain and the eurozone".
Meanwhile, pressure on Spain rose, as ratings agency Fitch put eight of the country's indebted regional governments on negative outlook. The downgrade, which involved some of the most important regions including Madrid, Catalonia and
Andalusia, could hamper their ability to fund themselves, adding to the problems mounting on the central government.
Andalusia, could hamper their ability to fund themselves, adding to the problems mounting on the central government.
Madrid is today due to unveil its plans to stem the regional debt crisis and control local spending. Fitch said the regions will be downgraded if the plans are not convincing.
Traders and analysts fear that the parallel crises are potent enough together to overwhelm Spain and lead to the need for a Greek-style bail-out.
The yield on Spain's benchmark 10-year bonds hit 6.68pc yesterday, marginally down from the Wednesday's six-month high but still considered unsustainable. The Ibex stockmarket fell marginally.
On Thursday, Brussels demanded a clearer plan for the rescue of Bankia, the fourth-biggest lender, implying that it is not convinced by Mariano Rajoy's plan to use Spain's FROB bank fund to pay for a €23.5bn cash injection.
"What we need from the Spanish government is for it to communicate the restructuring plan for Bankia and the options it is considering to restructure and if possible recapitalise," said EU spokesman Amadeu Altafaj. "We will then study it to see if it fulfils conditions for public aid."
He added: "We cannot keep up this uncertainty which is weighing on confidence in the markets."
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