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Spain did a lot of mistakes. I.e. not to take any action to stop the real state bubble, create unnecessary infrastructure, or the fact that a plenty of youngste
by pdelgallego 15y ago
Spain did a lot of mistakes. I.e. not to take any action to stop the real state bubble, create unnecessary infrastructure, or the fact that a plenty of youngster stopped their education in order to work as construction workers.
- nl 15y agoMy understanding is that they did try and stop the real estate bubble (to some extent anyway) but regulating bank loans, but the German banks stepped in to fund riskier projects.
- pdelgallego 15y agoUnfortunately, many Spanish commercial banks and saving banks bet the farm on the real state market. For example the Sabadell Bank just bought the CAM (a saving bank) for one euro.[1] The were some talking about burst the bubble in 2004, but Zapatero's government never implement the reforms. The Spanish prime minister regret later about not bursting the bubble earlier.[2] Spanish banks are well protected against loans because, the asset pledge as collateral" clause is rarely use in Spain. [1] http://www.businessweek.com/news/2011-12-08/sabadell-buys-cam-for-one-euro-as-spain-banks-bail-out-caja.html http://www.businessweek.com/news/2011-12-08/sabadell-buys-ca... [2] http://www.elmundo.es/elmundo/2011/06/28/suvivienda/1309274989.html http://www.elmundo.es/elmundo/2011/06/28/suvivienda/13092749... (Spanish)
- oelewapperke 15y agoAnd the alternative was a readjustment to previous levels. Which would have meant a 10-15% decline in the euro in the matter of months, with loads of people losing their life savings. Like in America. It actually looked like Bush was actually going to do that for a while, when he decided not to save Lehmann brothers. The only way not to bet the farm was to let every bank go broke.