No, not a banking crisis in the Home Counties. News is that Spanish Banks have trousered some €53 billion in the last three months alone from the European Central Bank (ECB). Spain, as many Brit holiday home owners know, has been in the midst of a property crisis for some months and there are no signs of it getting any better (being in the euro, the Spanish can’t reduce interest rates).
Interestingly there is no provision for the ECB to act as lender of last resort, as the Bank of England does (you can imagine what the Germans felt about the idea of Mediterranean Banks having their madness and corruption underwritten from Frankfurt) and so, like so much in the EU, this has been done on the quiet. The Banks have issued promissory notes to the ECB which has not sold them on (no one would want to buy them).
My view is that if you’re going to have a disaster let it be out in the open.
Credit to Ambrose Evans-Pritchard for the story.
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