Wednesday, 16 November 2011

at last...

someone is thinking about the mountain of unrecognized losses in Spanish banks due to bad real estate deals, and the need to recapitalize. Bloomberg runs a story that the PP - poised to take power in Sunday's election - is preparing either a bad bank solution or will force capital injections. The latter (especially if done right - break up some of the bigger banks) would be a sensible step in the right direction... but my money is that there will be a half-botched bad bank instead, with taxpayer money dropped on the banks in exchange for some vague hope of starting lending again.

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