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dipsydoodle

(42,239 posts) Tue Jun 5, 2012, 07:54 PM Jun 2012

Spain says markets closing on it, seeks help for banks

Source: Reuters

(Reuters) - Spain said on Tuesday it was losing access to credit markets and Europe should help revive its banks, as finance chiefs of the Group of Seven major economies conferred on the currency bloc's worsening debt crisis but took no joint action.

Treasury Minister Cristobal Montoro sent out a dramatic distress signal about the impact of his country's banking crisis on government borrowing, saying that at current rates, financial markets were effectively off limits to Spain.

"The risk premium says Spain doesn't have the market door open," Montoro said on Onda Cero radio. "The risk premium says that as a state we have a problem in accessing markets, when we need to refinance our debt.

Spain is beset by bank debts triggered by the bursting of a real estate bubble, aggravated by overspending by its autonomous regions. The premium investors demand to hold its 10-year debt over the German equivalent hit a euro era high last week on concerns it will eventually have to take a Greek-style bailout.

Read more: http://uk.reuters.com/article/2012/06/05/uk-eurozone-idUKBRE8540LU20120605

5 replies

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Highlight:

Spain says markets closing on it, seeks help for banks (Original Post) dipsydoodle Jun 2012 OP

This is not good news. nt Mojorabbit Jun 2012 #1

Screw the banks naaman fletcher Jun 2012 #2

It sounds critical flamingdem Jun 2012 #3

What are the pros and cons if Spain's banks go bankrupt? RickFromMN Jun 2012 #4

As far as I can tell, the only thing holding the world economy together at this point GliderGuider Jun 2012 #5

Mojorabbit

(16,020 posts)

1. This is not good news. nt

Reply to dipsydoodle (Original post)

Tue Jun 5, 2012, 10:42 PM

Jun 2012

naaman fletcher

(7,362 posts)

2. Screw the banks

Reply to dipsydoodle (Original post)

Tue Jun 5, 2012, 10:58 PM

Jun 2012

Let them go under. I understand the argument that they need to stay open for the normal functioning of business, fine. But only bail them out after they have gone under so that the equity owners get ZERO.

flamingdem

(39,342 posts)

3. It sounds critical

Reply to dipsydoodle (Original post)

Tue Jun 5, 2012, 11:56 PM

Jun 2012

No one will help them?

RickFromMN

(478 posts)

4. What are the pros and cons if Spain's banks go bankrupt?

Reply to dipsydoodle (Original post)

Wed Jun 6, 2012, 05:48 AM

Jun 2012

I assume the biggest negatives are what a bank bankruptcy would do to the Spanish people,
and a Spanish bank bankruptcy might drag other banks, in Spain and abroad, down too.

On the positive side, we would get to see what happens when a bank goes bankrupt.
I believe the right wing advocates letting banks, companies, and people go bankrupt.

I suspect world economic disaster would ensue.

If a few Spanish banks went bankrupt, we might get some needed bank reform legislation.
We might force the banks to go back to lending money, as their most important and only activity.
In my dreams, we might even break up too-big-to-fail financial institutions.

I've come to the horrible conclusion, only a world depression will shake the right wing beliefs.

GliderGuider

(21,088 posts)

5. As far as I can tell, the only thing holding the world economy together at this point

Reply to RickFromMN (Reply #4)

Wed Jun 6, 2012, 08:58 AM

Jun 2012

is the fear of consequences that's keeping everyone from making the first move. If Spanish banks crash, the rush for the exits would spread contagion to most of the industrialized world. There's a growing probability that we're looking down the barrel of a loaded gun.

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