Seeking outside help and selective default two years later: this way the crisis developed in Greece. The European banking system
as a whole has experienced this stress, but the repetition of the scenario in Spain
could trigger the collapse of the real world level.
According to the Bank for International Settlements, at the end of 2011 in the portfolios of banks around the world accumulated about 500 billion euros of the Spanish government and corporate debt. 117 billion are in the German banks, French banks
are lagging behind slightly (92 billion euros) followed by Britain
(67 billion) and U.S.
(37 billion euros).
Meanwhile, 500 billion euros - this is just the size of the European stabilization mechanism
, through which the EU intends to provide assistance to Spain, if it will be necessary.
Therefore, analysts believe that it is better to use European money to recapitalize Spanish banks without bringing the matter to the bankruptcy of all Spain, which accounts for 12% of GDP in the eurozone.
The symbol of the debt crisis is now called the Spanish bank Bankia
. This is the third institution in the country in terms of assets. The company blamed for worsening the already difficult situation in the country. Its problems are further evidence of powerlessness and vulnerability of the banking system in Spain.
Spain seeks recapitalization
Recapitalization needs of Spanish banks, according to experts, ranging from 60 to 200 billions of euros. Only for saving Bankia Spanish state will have to spend 23.5 billion. This figure had plunged the markets into a panic, because even the 26th of May a new banking CEO was talking about a much smaller amount.
The pressure of debt markets in Spain continues unabated. And the Spanish bond yields reached a level that the country may not be able to service its debt.
At the moment, the current rules of the European fund
of financial stability say that the assistance can be provided to countries, which in return would agree to certain terms and conditions.
Now everything will depend on what exactly will these conditions. They can be tough, as in the case of Portugal or Ireland, or a soft, more flexible, focused mainly on banks. It depends on the "big three" (Germany, France and Italy) and the rest of EU.
Financial help, which Spain needs immediately
Well, let's imagine that the three biggest Spanish banks – BBVA, Santander and La Caixa
, which are practically the half of the whole Spanish banking system and they do not need any help. As for the second half, the help will focus perhaps on one-third of the banking system, or 40%, according to the IMF
While we do not know the exact figures,but we can talk about 50-60 billion euros, including assistance to Bankia - a large organization, which is in need of recapitalization. That is the help, which Spanish banking system probably needs at these times.
Eurozone finance ministers expressed on Saturday their willingness to provide the help to Spanish banking system of around 100 billion euros and the Prime Minister of Spain
has decided to accept this assistance. The final figure will be known later but the good news is that the markets have noted a gap in the euro / dollar and the subsequent growth of the pair to 1.2670. Of course, the European crisis did not stop there, so this news has allowed Forex market participants to only "breathe" and continue to cut short positions on euro, which recently managed to accumulate a record number