Rodrigo Rato, chairman of embattled Spanish bank Bankia SA, has resigned from his post in order to help smooth the path for the government's debt rescue plan.
Mr Rato announced yesterday (7 May) his decision to depart his role at the financier as prime minister Mariano Rajoy is set to permit the use of public funds to assist the country's struggling banking system.
Previously, Mr Rajoy had dismissed this possibility on the grounds that the sector could recover without external help, but the potential for these problems to cause a systemic collapse in the eurozone means he now would do so as a "last resort".
He said in a radio interview: "If it were necessary to get the credit to save the Spanish financial system I would not hold back from doing what other EU countries have done - loan them public money."
This comes after the Financial Times reported that many analysts feel Spain's so-called bad bank initiative is implausible.
By Gary Cooper