Catalonia is boiling over. Streets have been taken over by massive crowds of marchers demanding their right to hold an independence referendum. Defying Madrid’s orders to stand down,  over two million Catalans voted on Oct. 1 to secede—92% of the votes cast. Some 800 Catalans, including firemen, were injured in graphically recorded clashes with federal police who were acting on orders from Prime Minister Mariano Rajoy to stop the illegal referendum.

The vote is a historic challenge to the authority of the Spanish state and threatens to plunge the country into a constitutional crisis. Financial markets were rattled by the vote. Madrid main equities benchmark, the Ibex 35, closed down 1.2% and yields on the 10-year Spanish bonds were up 7 basis points.

More dramatic were the stock market losses taken by Catalonia’s two leading banks. Banco Sabadell’s price fell 4.57% and La Caixa’s 4.42%.