S038;P slashes Spain8217;s credit rating

8220;The financial profile of the Spanish banking system will,in our opinion,weaken further,8221; Samp;P said,adding that while the factors that impede Madrid8217;s recovery of domestic demand 8220;are not unique to Spain,they impact Spain with particular force given its high level of private sector leverage,much of which is funded externally.8221;

On Tuesday,the credit ratings of top Spanish banks,including Santander and BBVA,were downgraded on Tuesday by Standard amp; Poor8217;s as well as ratings agency Fitch over poor growth prospects.

Samp;P had said the 8220;tougher-than-previously-anticipated macroeconomic and financial environment in Spain8221; prompted its downgrade of 10 bank ratings.

Spain is slashing spending to reduce its deficit and convince markets it can stay on top of its debt and does not need a bailout.

However,the austerity drive has nearly stalled growth,with Samp;P and others warning Spain risks ending up in double-dip recession.