{"id":20785,"date":"2016-05-29T16:42:07","date_gmt":"2016-05-29T21:42:07","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20785"},"modified":"2016-05-29T16:42:07","modified_gmt":"2016-05-29T21:42:07","slug":"the-banking-crisis-in-spain-is-back","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20785","title":{"rendered":"The Banking Crisis in Spain is Back"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2016\/05\/28\/spain-banking-crisis-is-back-banco-popular-capital-npl\/\">The Banking Crisis in Spain is Back<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>The shares of\u00a0Banco Popular\u00a0got crushed.<\/strong><\/p>\n<p>After three years of relative calm and one month before yet another round of do-or-die general elections, the words \u201cbanking\u201d and \u201ccrisis\u201d are back on the front pages of Spain\u2019s newspapers. Despite the untold billions of euros of public funds lavished on \u201ccleaning up\u201d their balance sheets and the roughly \u20ac240 billion of provisions booked against bad debt since December 2007, the banks are just as weak and disaster-prone as they were four years ago.<\/p>\n<p>Francisco Gonz\u00e1lez, the President of Spain\u2019s second biggest financial institution, BBVA, was the first to raise the alarm, warning a few\u00a0days ago that the ECB\u2019s negative interest rate policy\u00a0<a href=\"http:\/\/wolfstreet.com\/2016\/05\/24\/nirp-is-killing-us-spanish-bank-bbva-gonzalez\/\" target=\"_blank\">\u201cis killing\u201d European banks<\/a>.<\/p>\n<p>Now, it seems Gonz\u00e1lez\u2019s prophecy is already coming true.<\/p>\n<p>Spain\u2019s sixth largest financial institution, Banco Popular, on Wednesday evening announced that it was urgently seeking to raise \u20ac2.5 billion in capital in order to shore up its finances. The news took many of the firm\u2019s investors by surprise given that just a month ago the bank\u2019s CEO\u00a0Francisco Gomez\u00a0<a href=\"http:\/\/www.bloomberg.com\/gadfly\/articles\/2016-05-27\/banco-popular-s-unpopular-fundraising\">had breezily reported<\/a>\u00a0that the bank had a very comfortable core capital level above the regulatory minimum and \u201cone of the best\u201d leverage ratios in the sector.<\/p>\n<p>The market\u2019s response to the latest news was emphatic. The bank\u2019s shares plunged 25% Thursday morning. There was not even the barest flicker of a recovery on Thursday afternoon. On Friday, the stock dropped another\u00a08.2%, to close at \u20ac1.59 per share, its lowest in 26 years. Over the three days, the stock plummeted\u00a032%.<\/p>\n<p>For the bank\u2019s shareholders, it\u2019s the second time this has happened in the last four years. In 2012, the bank\u2019s management \u2014 virtually man-for-man the same management team as today \u2014 pulled the exact same stunt in an effort to stabilize the bank\u2019s finances. The slogan the bank chose to sell that capital increase was \u201cOur Past and Our Present Guarantee Our Future.\u201d<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Banking Crisis in Spain is Back The shares of\u00a0Banco Popular\u00a0got crushed. After three years of relative calm and one month before yet another round of do-or-die general elections, the words \u201cbanking\u201d and \u201ccrisis\u201d are back on the front pages of Spain\u2019s newspapers. Despite the untold billions of euros of public funds lavished on \u201ccleaning [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[13915,61,13916,5660,233,282,4255],"class_list":["post-20785","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banco-popular","tag-banking","tag-bbva","tag-don-quijones","tag-ecb","tag-european-central-bank","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20785","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20785"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20785\/revisions"}],"predecessor-version":[{"id":20786,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20785\/revisions\/20786"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20785"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20785"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20785"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}