Spain says rigorous central bank offsetting crisis

"People can rest assured that their savings are at no risk in any Spanish financial institution," Pedro Solbes said. "We're convinced the Spanish system is not in any danger."

Speaking separately, Deputy Prime Minister Maria Teresa Fernandez de la Vega said the Spanish financial system's strength is due to government decisions and the central bank policies of recent years.

"We have a system that is fairly solid," Fernandez de la Vega told Cadena SER radio. "What's certain is the rigorous policies of the central bank and complementary decisions made by the government in the 1980s have served us very well and given us a financial system which many European governments now look up to."

Spain, one of Europe's economic powerhouses up until last year, has seen its economy stumble badly in recent months owing chiefly to a collapse of its key construction industry. After more than a decade of annual growth averaging 3 percent and more, predictions are for just 1.4 percent growth this year, with most blame being put on the failing housing market.

But as European governments announced a flurry of bank bailouts this week, Spain seemed to be immune to the crisis.

The policies drew praise from abroad Tuesday with the Financial Times running an article titled, "Time for Bankers to take Spanish Lessons."

The paper praised the Spanish central bank's unusual policy of discouraging banks from keeping large quantities of credit assets off their balance sheets and pushing them to hold higher levels of reserves than international accounting laws required.

"Spain's story shows it pays for small countries to challenge the dominant global consensus from time to time," the paper said.

Evidence of the country's strength was seen when the country's main bank, Banco Santander, quickly stepped in to buy up the savings business and entire retail branch network of Britain's Bradford & Bingley after the London government took it over.