We have mentioned …
… several times over the past few weeks how the rickety banks of Spain have practically been excluded from interbank funding markets, with the result that they get more and more of their short term funding from the ECB. In the month of June, this borrowing from the central bank has reached new heights, with the result that dizzying amounts are beginning to pile up.
As AFP reports:
„Spanish banks borrowed 126.3 billion euros from the European Central Bank in June, the Bank of Spain said on Wednesday, revealing a record figure as institutions here struggle to refinance on international markets. The amount borrowed last month rose by 78.6 percent from the amount at the same time last year and represents a rise of 47.5 percent over the amount borrowed in May, figures published on the website of Spain's central bank showed.“
Clearly, something is rotten in Den…, no, Spain. The situation has now been amplified by Fitch credit rating agency downgrading its long-term rating for Spanish bank Banco Popular by two notches on Wednesday and its short-term rating by one notch. Banco Popular is not just any bank – it's a pretty big one.
The report continues:
„Last month the Bank of Spain's deputy governor Javier Ariztegui told a parliamentary commission that since Easter Spanish banks had been forced to seek financing from the ECB because of lack of market confidence in Spain. "This situation can not last an eternity," he said.“
We would disagree with that, in the sense that in theory, it can last an eternity, figuratively speaking. It can last as long as there is an ECB willing to extend unlimited amounts of money from thin air to Spain's banks.
… several times over the past few weeks how the rickety banks of Spain have practically been excluded from interbank funding markets, with the result that they get more and more of their short term funding from the ECB. In the month of June, this borrowing from the central bank has reached new heights, with the result that dizzying amounts are beginning to pile up.
As AFP reports:
„Spanish banks borrowed 126.3 billion euros from the European Central Bank in June, the Bank of Spain said on Wednesday, revealing a record figure as institutions here struggle to refinance on international markets. The amount borrowed last month rose by 78.6 percent from the amount at the same time last year and represents a rise of 47.5 percent over the amount borrowed in May, figures published on the website of Spain's central bank showed.“
Clearly, something is rotten in Den…, no, Spain. The situation has now been amplified by Fitch credit rating agency downgrading its long-term rating for Spanish bank Banco Popular by two notches on Wednesday and its short-term rating by one notch. Banco Popular is not just any bank – it's a pretty big one.
The report continues:
„Last month the Bank of Spain's deputy governor Javier Ariztegui told a parliamentary commission that since Easter Spanish banks had been forced to seek financing from the ECB because of lack of market confidence in Spain. "This situation can not last an eternity," he said.“
We would disagree with that, in the sense that in theory, it can last an eternity, figuratively speaking. It can last as long as there is an ECB willing to extend unlimited amounts of money from thin air to Spain's banks.
Text zur Anzeige gekürzt. Gesamten Beitrag anzeigen »
