Via Zero Hedge (I'd love to read the full Daily Observation piece, if anyone has access to it):
We estimate that the Spanish banking system only has a few hundred billion euros left in eligible collateral. That means that some of the weaker banks are likely already getting close to a point where their collateral is exhausted. (We think this reality is the reason why we are seeing a number of legal changes in Spain that look like an attempt to scrounge up a bit more capital). if Spanish banks run out of ECB collateral, then the Spanish central bank would likely need to turn on its own ELA. The potential magnitude of such an operation would dwarf the nationalized money printing to date.