The head of the global banking industry's leading lobby group said the role of Spain's listed banks in the structure of the country's bad bank needed clarifying.

Charles Dallara, the managing director of the Institute of International Finance, said in an interview with daily El Pais on Friday that exposure to the country's weak unlisted savings banks should not be allowed to infect its healthy lenders.

"I don't understand .. the role that the Spanish banks will have in the bad bank, whether they will be amongst the private investors," he was quoted as saying.

"I believe it's important to protect the integrity of the whole banking system and not to infect healthy lenders with savings banks' weakness."

Dallara said he would seek clarification on these points in meetings with the Spanish government.

The IIF represents the interests of hundreds of banks worldwide and helped coordinate Greece's debt restructuring talks.

Spain has set up the bad bank, known by the acronym SAREB, to siphon toxic real estate assets off the balance sheets of lenders ahead of receiving funds from a 100 billion euro ($129 billion) credit line from Europe.

SAREB aims to buy up to 90 billion euros of toxic property assets at deep discounts and then sell them to investors over 15 years.

The government has talked to the country's three biggest banks Santander, BBVA and Caixabank about the possibility of them investing in the bad bank, a source told Reuters earlier this month.

The chief executive of the No. 2 bank BBVA said on Wednesday it had no interest in investing, a turnaround from comments in September when BBVA said it would consider taking a stake.

Spain wants to keep its stake in the bad bank below 50 percent to reduce the burden for state finances and avoid an impact on public debt, and expects the private sector to own at least 55 percent.

But SAREB will struggle to lure property investors, real estate consultants say.

($1 = 0.7730 euros)

(Reporting By Sonya Dowsett; Editing by John Stonestreet)