Company: BBVA Banco Frances S.A.

Spanish banks like BBVA are meeting regulators’ capital ratio targets by avoiding writing down toxic property loans, Anthony Fry, chairman of Espirito Santo Investment Bank U.K, told CNBC.

With its falling home prices and rising corporate and personal bankruptcies, Spain — whose economy is nearly five times larger than Greece — has now become the greatest threat to the global markets.

A pick-up in trading revenue in the first quarter of 2012 disguises a chilling future for investment banks who need to drastically cull their business under new regulation.

Spain's second-biggest bank, BBVA, said on Tuesday it would take a hit of 1 billion euros ($1.3 billion)on its 2011 results due to an adjustment in goodwill for its U.S. unit.