Unfortunately, underground economy has been a problem here for long. But that's just a secondary effect of other problems, specially the dysfunctional job marke

Unfortunately, underground economy has been a problem here for long. But that's just a secondary effect of other problems, specially the dysfunctional job market. The root of the current credit crysis is no mistery. When the housing buble bursted, the banks were left with a huge number of houses that nobody could buy. Instead of accounting for the losses, they swept them under the rug, taking the houses off the market and pretending everything was fine. This was a known problem. If you can read Spanish, take a look at this blog, alerting about exactly that problem, from March 2011: http://www.jesusencinar.com/2011/03/no-me-creo-los-numeros-del-banco-de-espana.html http://www.jesusencinar.com/2011/03/no-me-creo-los-numeros-d... The title says it all: "I can't believe Bank of Spain's numbers." The autor is the CEO of idealista.com, the most important real state web of Spain. A couple of weeks ago Bankia, one of the biggest spanish banks, could not hide it anymore. That was the beginning of the end. EDIT: an interview to the same guy in English: http://www.bloomberg.com/news/2011-03-22/bank-of-spain-underestimates-lenders-shortfall-idealista-says.html http://www.bloomberg.com/news/2011-03-22/bank-of-spain-under...