We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Interbank market freeze for smaller Spanish banks
inspector_monkfish
Posts: 9,276 Forumite
11:21 09Jun10 Spain small lenders frozen out of interbank market
* Interbank market freeze for smaller Spanish banks
* Source tells Reuters 'markets almost shut for Spain'
MADRID, June 9 - The European interbank market is not lending to smaller Spanish banks partly due to concerns the country could be heading for a debt crisis along the lines of EU partner Greece, an international bank source said on Wednesday.
The restrictions did not appear to be aimed at specific institutions so much as the country, the source said, and market access could ease if Spain's Socialist government announces further austerity measures.
Another source cited by Cinco Dias paper said the bigger Spanish banks appeared to be fine.
"Only the biggest Spanish banks are managing to get funding, but backed by bonds from other countries such as Germany. With our national bonds they are not managing to get anything," an executive at a Spanish savings bank was quoted as saying.
There have been signs for some weeks that Spanish banks were having to pay a premium to borrow in their domestic repo market as the broad repricing of euro zone sovereign credit risk raised lenders' concerns over the liquidity of the banking sector.
A credit analyst source told Reuters the issue was not one of liquidity, as the banks have the ECB to rely on, but that it shows that in the current risk-averse climate smaller banks are being ostracised.
"The markets are almost shut for Spain," the international banking source said.
Spain's 45 largely unlisted savings banks are suffering the impact of a sharp downturn in the property sector after a decade-long boom and are immersed in a government-driven consolidation process aimed at restoring the weaker banks to good health.
At the end of May, Spain's credit rating was cut by Fitch to AA+ from AAA, adding to fears that Spain is heading for a debt crisis from which it will need to be bailed out.
On Monday, the Treasury announced it would aim to raise between 3 and 4 billion euros on Thursday through the auction of a new benchmark, three-year bond.
Amid concerns that the auction might not be well enough bid, analysts have said they do not expect the auction to fail partly because Spanish banks such as Santander and BBVA would buy the bond if necessary because they have access to funding.
Ten-year bono yield spreads hardly changed on Wednesday morning, tightening marginally to 209 bps from 212 bps.
* Interbank market freeze for smaller Spanish banks
* Source tells Reuters 'markets almost shut for Spain'
MADRID, June 9 - The European interbank market is not lending to smaller Spanish banks partly due to concerns the country could be heading for a debt crisis along the lines of EU partner Greece, an international bank source said on Wednesday.
The restrictions did not appear to be aimed at specific institutions so much as the country, the source said, and market access could ease if Spain's Socialist government announces further austerity measures.
Another source cited by Cinco Dias paper said the bigger Spanish banks appeared to be fine.
"Only the biggest Spanish banks are managing to get funding, but backed by bonds from other countries such as Germany. With our national bonds they are not managing to get anything," an executive at a Spanish savings bank was quoted as saying.
There have been signs for some weeks that Spanish banks were having to pay a premium to borrow in their domestic repo market as the broad repricing of euro zone sovereign credit risk raised lenders' concerns over the liquidity of the banking sector.
A credit analyst source told Reuters the issue was not one of liquidity, as the banks have the ECB to rely on, but that it shows that in the current risk-averse climate smaller banks are being ostracised.
"The markets are almost shut for Spain," the international banking source said.
Spain's 45 largely unlisted savings banks are suffering the impact of a sharp downturn in the property sector after a decade-long boom and are immersed in a government-driven consolidation process aimed at restoring the weaker banks to good health.
At the end of May, Spain's credit rating was cut by Fitch to AA+ from AAA, adding to fears that Spain is heading for a debt crisis from which it will need to be bailed out.
On Monday, the Treasury announced it would aim to raise between 3 and 4 billion euros on Thursday through the auction of a new benchmark, three-year bond.
Amid concerns that the auction might not be well enough bid, analysts have said they do not expect the auction to fail partly because Spanish banks such as Santander and BBVA would buy the bond if necessary because they have access to funding.
Ten-year bono yield spreads hardly changed on Wednesday morning, tightening marginally to 209 bps from 212 bps.
Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)
(MSE Andrea says ok!)
0
Comments
-
It's the flip side of 'too big to fail' in the current climate if you're small enough to fail you're also too small to borrow.0
-
It's the flip side of 'too big to fail' in the current climate if you're small enough to fail you're also too small to borrow.
So how does a bank be the ''Goldilocks'' bank?...the parametres must change depending on the market, an the ability to comply with those parameters seem fairly limited0 -
lostinrates wrote: »So how does a bank be the ''Goldilocks'' bank?...the parametres must change depending on the market, an the ability to comply with those parameters seem fairly limited
From the banks' point of view it's pretty simple. Become as big as possible as quickly as possible, swallow your rivals, destroy competition then lobby for tighter regulation to keep start-ups out of the market and jack up your prices and margins.
Anyone here old enough to remember what banking was like before building societies got to compete with the banks? They opened at 9.30am, closed at 3pm and also shut for an hour or more at lunchtime. No Saturday opening. Pay for writing a cheque, pay to out money into the bank, pay to take it out again.0 -
Anyone know what the rating is for Morocco as I'm buying a villa there.0
-
Anyone know what the rating is for Morocco as I'm buying a villa there.
Local currency (charmingly known as MAD by the International Standards Organisation) Government bonds are Ba1 according to Moody's.
This is the highest junk rating. 'Ba' means there are speculative elements to the investment, that is there is a chance you'll lose some or all of your investment.
I've never been to Morocco but it always seems a nice place. I've met quite a few Moroccans in Paris and they were a very charming bunch by-and-large. Not sure what this has to do with small Spanish banks (excepting the small Spanish land holdings in Morocco which are in no way analogous to Gibraltar)0 -
-
Thrugelmir wrote: ».
Take a trip to Spain and see the vacant property. Its an eye opener. The Brits may have bought property but the Spaniards built too much.
In a year or two I might become interested in buying a holiday home there is the market and currency exchange rate is advantageousChuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
chucknorris wrote: »In a year or two I might become interested in buying a holiday home there is the market and currency exchange rate is advantageous
you'll be buying it with Pesetas by then.....Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)0 -
inspector_monkfish wrote: »you'll be buying it with Pesetas by then.....
Well if they were out of the Euro I dare say that would make the price more attractive (I hope). I just need to get my head around long distance second home ownership which will not be easy as it is very off putting to me, the flip side is that if we are to spend our winters in Spain I would like to have a home from home.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
chucknorris wrote: »Well if they were out of the Euro I dare say that would make the price more attractive (I hope). I just need to get my head around long distance second home ownership which will not be easy.
i'm sure it would have its advantages thoughPlease take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.4K Banking & Borrowing
- 253.7K Reduce Debt & Boost Income
- 454.4K Spending & Discounts
- 245.4K Work, Benefits & Business
- 601.2K Mortgages, Homes & Bills
- 177.6K Life & Family
- 259.3K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards