FrostyLeaf
Member
- Joined
- Feb 20, 2010
- Messages
- 32
The Inter-Alpha Group's Banco Santander continues to lead the implosion of the Spanish banking sector. The Madrid Stock Exchange collapsed for the third straight day with Banco Santander and Banco Bilbao Vizcaya Argentaria (BBVA) leading the way, with a decline of 2% in a third straight day of losses. Santander and BBVA have both now lost over 25% of their market capitalization in the last seven weeks.
A very senior Brazilian banking source in Europe told EIR that it is well known in Brazil that Santander has been sitting on a pile of junk, and has only been saved because of its holdings in Brazilian state debt. When questioned on the appropriateness of the high interest rates Brazil offers and the costs of the carry trade, he indicated that he himself was not pleased with it. Furthermore, he said, there is a debate in Brazilian policy circles exactly on this question.
Meanwhile, the Financial Times reports that Spain's cajas, or savings banks, are in a race against time to create mergers among themselves which is expected to reduce the number of cajas from 45 to 20. Most are on life support from the European Central Bank, whose repo operations are their only access to credit. The cajas hold the lion's share of the nearly EU500 billion in mortgages — most of which have gone bad. The cajas have to merge by June 30th in order to qualify for funds from the government's Fund for Orderly Bank Restructuring (FROBS). The mergers will lead to extensive lay-offs.
A very senior Brazilian banking source in Europe told EIR that it is well known in Brazil that Santander has been sitting on a pile of junk, and has only been saved because of its holdings in Brazilian state debt. When questioned on the appropriateness of the high interest rates Brazil offers and the costs of the carry trade, he indicated that he himself was not pleased with it. Furthermore, he said, there is a debate in Brazilian policy circles exactly on this question.
Meanwhile, the Financial Times reports that Spain's cajas, or savings banks, are in a race against time to create mergers among themselves which is expected to reduce the number of cajas from 45 to 20. Most are on life support from the European Central Bank, whose repo operations are their only access to credit. The cajas hold the lion's share of the nearly EU500 billion in mortgages — most of which have gone bad. The cajas have to merge by June 30th in order to qualify for funds from the government's Fund for Orderly Bank Restructuring (FROBS). The mergers will lead to extensive lay-offs.
