sábado, 15 de janeiro de 2011
The Spanish Bank Debt and the Future of Europe.
Spanish banks are facing some debt maturities of about 80,000 million euros. Most of these maturities belonging to entities that have more facilities to be financed by its size:
Santander - 27.400 M
BBVA - 11.900 M
Banco Sabadell - 2.877 M
Banco Popular - 2.826 M
Bakinter - 1.500 M
Spain is one of the countries with the world's private debt, measured as a percentage of GDP. The addition of credit to businesses and families exceeded the 2.84 trillion in October, according to the Bank of Spain. The ratio of loans over deposits reached in September last year, latest data available, 154%. Above 100%, deposits are no longer sufficient to fund loans. It is no coincidence that the four hardest hit countries in the eurozone, Ireland, Greece, Portugal and Spain are those with a higher ratio of the entire region.
About Publc Emissions, in good times, Spain became the second largest emitter of Europe, surpassed only by Germany. Now, the difficulty of putting this type of debt are enormous: with an unemployment rate of 20% and anemic economic growth, there are many doubts about the viability of loans, with a volume of around 1.1 billion.
But you have to meet the obligations and obtain liquidity. When the interbank market does not help, it’s necessary to appeal to the ECB, which must provide collateral as security for funding. In July 2010, the appeal of the Spanish financial system became 29.1% of what gave the ECB. At the end of the year, the pressure was reduced and Spain sought 66,986,000, half in July. But the ECB has already said he does not want banks to become "dependent" on their auctions, which at the moment are unlimited and fixed rate of 1%.
The state’s emissions are considered the safest. If the Treasury has to pay more than before, the private sector will face even higher costs. Goldman Sachs estimates that the total requirements of public funding in Spain for 2011 are of no less than 210,100 million. This figure could rise if the crisis leads to an increase in defaults and a further deterioration in the price of the assets backing the loans.
Professor Marti Pachama, EAE Business School said that "The size of Spain turns it practically impossible to rescue. We are talking of about 475,000 million euros. A bailout of this size would likely provoke a new banking crisis and, by extension, the euro”.
See the article at Cinco Días (in Spanish).
Image from here.