The bad loans held by Spanish banks are surging, hitting a record high in June.

The Bank of Spain said Friday that the country's banks now hold more than $200 billion worth of loans at risk of not being paid back. That is more than 9 percent of their total loan portfolio, the largest share of troubled loans since the central bank began keeping records 50 years ago. Many of the loans in default were made to home builders and other real estate interests.

The Spanish government said it would soon request the first installment of the $123 billion bank rescue fund approved in June by Madrid's partners in the 17-nation euro currency union.

Spain's economy is in recession and the country's jobless rate is near 25 percent, the highest in the industrialized world. The Spanish government has imposed sharp austerity measures to cut its deficit, but the spending cuts have also curbed economic growth.