EVER since the government stepped in to rescue Bankia two months ago, there have been mounting calls in Spain for an inquiry into what went wrong. Leading politicians have turned a deaf ear, as they fear a probe could expose cosy links with the bank's management.

Judges have now taken the matter out of their hands. Spain's high court has opened a fraud probe into whether top executives falsified Bankia's accounts and misled investors during the bank's flotation. One of the executives is Rodrigo Rato, a former economy minister and, until recently, chairman of Bankia.

If any criminal acts are uncovered, they should, of course, be punished. But this investigation into alleged misconduct in a single bank should not distract from the broader question of what went wrong in the system as a whole. Only a public investigation can demonstrate that Spain is willing to face up to what has led to the wreckage of its financial system.

This inquiry should address at least two points. First, there is the question of what led Spain's regional savings banks to throw their money around, helping to create a housing bubble with easy credit. The cajas' links with local politicians, anxious to curry favour with voters, were clearly too close. But there are also failings within the Bank of Spain, which did too little to halt the lending spree.

Second, there is the question of how the crisis was managed. The way in which Bankia was floated is a sticking point. But there is a broader issue over why it is taking so long for politicians to admit the true extent of the losses and take the decisive steps needed to deal with them.

Spain's political class is rightly worried that the results of an inquiry may anger voters. But avoiding a mea culpa could create an even greater backlash. In the case of Bankia, hundreds of thousands of retail clients were stuffed with shares whose value has plummeted since the flotation.

Madrid has to make clear to its citizens that the right lessons have been learnt and that any misconduct will not be tolerated again by the authorities. London, July 6