Spanish financial markets remain under the cosh

The financial markets in Spain and other peripheral members of the euro zone remained under heavy pressure on Monday after the results of the stress tests carried out on European banks were announced and European leaders strove to reach an agreement on how best to deal with Greece's debt crisis.

The yield on the benchmark Spanish government bond hit a euro-era high of 6.33 percent as the spread with the German equivalent jumped by almost 30 basis points to close at 367 basis points. The yield on the Italian 10-year government bond also hit a new euro-era high as contagion from the situation in Greece continued to threaten the health of the single-currency system.

The Spanish blue-chip Ibex 35 index shed 1.44 percent to 9,347.80 points. But it was not the worst performer in Europe, with the Euro Stoxx 50 down 1.98 percent, and the CAC 40 in Paris shedding 2.04 percent.

Spain emerged relatively well from the stress tests. The failure of five of the country's lenders had already been expected, while leading bank Santander and BBVA are well positioned to weather hypothetical financial storms. There were concerns, however, that European banks may have to raise an additional 80 billion euros in capital.