A man shouts slogans during a protest outside the headquarters of Spain's fourth largest bank Bankia in Madrid on May 24, 2012.
Investors are fleeing Spain as the financial crisis worsens while Madrid battles to contain fears of an economic collapse.
The European Central Bank said on Wednesday that private individuals and companies are withdrawing their money out of Spanish Banks.
Data shows private deposits at Spain's financial institutions fell by more than 30 percent in April.
The interest rate on Spain's 10-year bonds rose to 6.703 percent as the country battled to avoid being the next victim of the eurozone crisis.
Stock prices fell all over the world and Madrid's IBEX-35 index slumped 2.58 percent to a nine-year low at 6,090.4 points.
The euro slumped to a two-year low versus the US dollar amid fears that Spain could be forced into asking for a bailout for its ailing banks.
The European single currency sank below USD1.24, touching a low point last seen on July 6, 2010.
Also on Wednesday, the European Commission said Spain is on top of the list of the eurozone 12 critical economies due to the countries’ deepening financial crisis.
Spain’s central bank reported on Tuesday that Spain’s economy would shrink in the second quarter of 2012, with the recession expected to continue until at least mid-2012.
Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, taking with it millions of jobs.
The worsening eurozone debt crisis has raised Spain's financing costs and raised concerns that the country might have to seek a European Union bailout, like Greece.