Spain has approved major reforms to its banking sector, which has been saddled with bad loans.
It has ordered banks to set aside billions of dollars as insurance against risky investments.
Spain's banks were hit by billions of euros of losses after a decade-long property bubble burst in 2008.
The decision comes amid latest prediction from the EU which says Spain is going to stay in recession for some time to come.
Al Jazeera's Sonia Gallego reports from Madrid.
