SMALLER BANKS IN THE FRAME Spain's government has said that changes to refinanced loans would at most create an extra 2 billion-euro capital shortfall across the sector, although it is unclear whether that takes into account potential further rises in coverage levels. Some small and mid-sized banks would be under the most pressure were this to happen. Coverage levels for refinanced debts at Liberbank (LBK.MC) and BMN, two former savings banks which took European aid last year, are already below average, at 11.8 percent and 8.2 percent respectively. A spokesman for BMN said it planned to raise provisions to reach a coverage level of 15 percent on refinanced loans by the end of this calendar year. He did not detail what further impact that would have on the bank. Liberbank declined to comment. Other mid-sized banks such as Banco Popular ( POP.MC ) and Bankinter (BKT.MC) are also lagging peers.