Concerns over the outlook for Spanish banks continued to mount, weighing on sentiment despite comments from Spanish Prime Minister Mariano Rajoy Monday indicating that Spain was not seeking an outside rescue package for its troubled banking sector.
Such worries were reflected in Monday's 0.16 percentage point rise in 10-year Spanish bond yields to 6.45% and a widening in the 10-year Spanish/German bond yield spread to a euro-era record.
Systemic risk is on the rise, and the problems have increasingly become circular, with banks themselves large holders of government debt. Spain has become another problem child for the (European Union), and as bond yields approach 6.5%-7.0% the (European Central Bank) may need to consider kick-starting its Securities Market (bond buying) Program in an effort to cap yields,
Japan's Nikkei Stock Average skidded 0.3%, Australia's S&P/ASX 200 was flat, South Korea's Kospi Composite added 0.5% and New Zealand's NZX-50 was flat.
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