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Actually, not quite. Spain hasn't nationalized the debt directly but instead, since the beginning of the crisis, is continuously pumping money into banks that s
by sentenza 13y ago
Actually, not quite. Spain hasn't nationalized the debt directly but instead, since the beginning of the crisis, is continuously pumping money into banks that should have gone under. It is ruinous to Spain's public finances, but we don't hear so much about it, since the relative size of that particular debacle is smaller than the Irish "public finances suicide by banking".
- omegant 13y agoThe spanish banks more exposed to the construction bubble bust were the "cajas". They are not for profit saving banks, and not private, they are controlled by politicians and unions. They have saved them because they had huge holes created giving high risk loans to the friends of the political parties heads. Une big example is Bankia (previously caja madrid), the president of bankia was a friend of Aznar and certainly underqualified. His last big hole was the sale of a prefered stock emission to small savers and old people(no big financial entiy bought those), to save the caja from default. They made people think that they were saving products, they've lost 90% of the invested quantity. There are other cases of billions of € in credits to construction companies that were unable to repay, the high manager in charge of the operation joining thd board afterwards... Private banks like santander or BBV are not that exposed to the construction bubble, they are not the ones that need a bailout. It's a big shame..