However, the crisis presently faced by the banking system in Spain mainly due to the real estate bubble that burst in 2007 has become the focal point of interest for supervisors and regulators. Apprehensions have been raised about whether Spanish banks actually faced the crisis or they merely postponed their losses, making it even worse for the banking sector.
It is now apparent that banks in Spain were not reporting all their losses. This thinking was given a boost when Bankia, the largest mortgage lender of Spain, revised its earnings for 2011 from € million profit to € billion loss.