Spanish Economy Minister Luis de Guindos outlined the nation's latest plan to clean up the banking sector.
NEW YORK (CNNMoney) -- Spain announced another round of financial sector reforms Friday as the government seeks to restore confidence in banks hurt by the housing bust.
Spanish banks will be required to boost provisions by €30 billion for real estate loans previously considered "non-problematic," Economy Minister Luis de Guindos told reporters.
The measures are in addition to rules issued last February, which required the banks to set aside about €50 billion for "problematic" real estate loans that were non-performing.
Madrid also announced plans to hire two independent auditors to assess the value of bank real estate assets.
Banks will be forced to "relocate" foreclosed real estate assets into an independently managed company before Dec. 31, according to documents posted on the Spanish government's website.
The documents did not elaborate on what would happen to the assets after they were moved off the banks' balance sheets.
"The effectiveness and success of the government's latest bid to cleanse the banking sector will hinge critically on this element of the plan," analysts at Daiwa Capital Markets wrote in a note to clients.
The reforms are designed to restore confidence in the Spanish banking sector as the nation's economy tumbled into recession. The government ultimately wants to ensure that bank balance sheets are healthy so they can resume lending to Spanish businesses and consumers, according to the documents.
The announcement comes days after Spain effectively nationalized Bankia, the nation's third-largest bank.
Spain has already undertaken several attempts to clean up the financial sector under previous administrations. But many analysts say it will take hundreds of billions of euros to fix the problem once and for all.
That will prove challenging because the Spanish government has already warned that its budget deficit will be larger than expected this year.
At the same time, the nation's borrowing costs have been rising as investors in the bond market fear Spain could become the next euro area nation to fall victim to the debt crisis.
|What we want Apple to unveil at WWDC|
|Millennials squeezed out of buying a home|
|7 traits the rich have in common|
|Big Data knows you're sick, tired and depressed|
|Your car is a giant computer - and it can be hacked|
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.27%||4.22%|
|15 yr fixed||3.27%||3.27%|
|30 yr refi||4.23%||4.20%|
|15 yr refi||3.25%||3.25%|
Today's featured rates: