Monday, February 21, 2011

Spain's Banks Have 100B Euros in Problem Assets

The above is a chart of unemployment in Spain.

The Bank of Spain said today that the while total exposure of Spanish savings banks to real estate and building is about 217 billion euros (USD $297B), 100 billion euros is classed as “potentially problematic,”
The gap between Spanish and German borrowing costs spread higher to 216 basis points today (Bloomberg).

Miguel Angel Ordionez, Bank of Spain Governor said that international investors don’t always understand Spaniards’ "track record of paying off their mortgages", and that they mistakenly compare Spain with other countries where it is easier to walk away from mortgage debts.

Bad loans on mortgages reached 4% after the last banking crisis in the 1990s, and amounted to 2.5$ in September last year, according to the bank.

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