Risk Qualification agency Moody's lowered its rating of 16 Spanish banks late on Thursday evening.

The move came after a difficult day on the stock markets following rumors of a run on the recently intervened Bankia, the fourth biggest bank in Spain, which saw 14 percent knocked off the value of its shares, and came after Moody's lowering its rating of four of Spain's autonomous communities.

On a day when Spain's risk premium again passed the 500 mark to end the day at 490 points, its highest ever closing level, following an issue of 3 and 4 year treasury bonds, at rates of just under and just over 5 percent, the agency justified its decision by pointing out the difficult conditions in which Spain's banks are operation, conditioned by the return of recession, a crisis in property, and high rates of unemployment, which in Spain is around 5.6 million people out of work.

The 16 banks suffered reductions of between one and three points on the agency's scale, with Banco Santander losing three points, dropping from Aa3 to A3, the same as Caixaban, while Bankinter drops from A2 to Baa2.

Others such as Liderbank have dropped to Ba1, as Moody's explains its decision basing it on the difficulty Spain faces in reducing its deficit to the objectives of 5.3 percent by the end of this year and 3 percent by 2013, in the current climate of recession and fiscal retrenchment.