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Spain Identifies 'problematic' Loans At Savings Banks

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http://www.nytimes.com/2011/02/22/business/global/22cajas.html?_r=1&ref=business

Spain’s central bank Monday classified 46 percent of the exposure the country’s savings banks have to the construction and real estate sectors as “problematic.”

But Miguel Ángel Fernández Ordóñez, the governor of the Bank of Spain, insisted that such a risk level — €100 billion, or about $137 billion, of the €217 billion total — did not endanger the Spanish financial sector as a whole.

At a news conference, Mr. Fernández Ordóñez also described new rules on capital requirements approved by the government Friday as “essential and necessary” to avoid a collapse in Spanish banks’ access to external financing, which in turn could cause a much more severe domestic credit crunch.

The latest risk assessment by the central bank is an attempt to reassure investors that huge and as yet unrecognized losses linked to reckless real estate lending are not about to sink the savings banks, known as cajas.

Next month, the central bank will also publish a breakdown estimate of the financing needs of each caja. Such additional transparency comes as the cajas prepare to seek more private financing to meet the tougher capital requirements set by the government, in some cases via initial public offerings.

Mr. Fernández Ordóñez was somewhat more optimistic about the situation than the finance minister, Elena Salgado, who said recently that any forced state rescue of collapsing cajas would be no more than €20 billion. He said it would be “clearly” less than that amount.

Excellent news, I'm sure the real estate and construction sectors are only a tiny proportion of Spanish banking business so 46% of nothing to worry about!

Still just be relieved it's contained...

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IRRO,

I am sure that the Spanish central bank is right when it says that there is no risk. So far we have had nothing but truth and honesty from bankers of all ilks, central and commercial, and every pronouncement that they feel that they have had to make has turned out to be right. If it wasnt for the liquidity problems at Lehman's, their undervalued loan book would have seen them rise to ever greater profitability. And Goldman Sachs would most certainly have survived without the indirect $100billion dollar bailout via AIG, I mean, how could the loss of a mere $100 billion affect a corporation so inherently honest and hardworking?

Bond yields werent falling today without good reason.

Do you happen to know of the Fed, Bank of England and the ECB are buying up each others nations government bonds by the way?

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IRRO,

I am sure that the Spanish central bank is right when it says that there is no risk. So far we have had nothing but truth and honesty from bankers of all ilks, central and commercial, and every pronouncement that they feel that they have had to make has turned out to be right. If it wasnt for the liquidity problems at Lehman's, their undervalued loan book would have seen them rise to ever greater profitability. And Goldman Sachs would most certainly have survived without the indirect $100billion dollar bailout via AIG, I mean, how could the loss of a mere $100 billion affect a corporation so inherently honest and hardworking?

Bond yields werent falling today without good reason.

Do you happen to know of the Fed, Bank of England and the ECB are buying up each others nations government bonds by the way?

Sorry I don't recall asking for sarcasm. :ph34r::lol:

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  • 277 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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