MADRID-The two top banks in Spain said over the weekend thatthey will set aside another $5.8 billion to protect against realestate-linked loan failures. The move comes after the governmentsaid on Friday that all banks in the country need to set asideanother $38.5 billion to cover potential bad real estate loans.

In February, the government had already required banks to setaside about $70 billion for real estate losses. BancoSantander had already set aside $3 billion after theFebruary request, and now has provisioned another $3.5 billion, thefirm said Sunday. Also, Banco Bilbao VizcayaArgentaria said Sunday it is setting aside $2.8billion.

In a report released Thursday, BBVA said the country is now in aconfirmed recession, with an expected contraction of 1.3% GDP thisyear. Higher Spanish bond prices are the fault of the deficit notgoing down as much as the government has stated as a goal, as wellas a lack of transparency for how the state will hit that target,according to the bank’s report.