{"id":26493,"date":"2017-10-05T07:19:58","date_gmt":"2017-10-05T12:19:58","guid":{"rendered":"http:\/\/olduvai.ca\/?p=26493"},"modified":"2017-10-05T07:19:58","modified_gmt":"2017-10-05T12:19:58","slug":"catalonia-chaos-begins-to-squeeze-spains-financial-markets","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=26493","title":{"rendered":"Catalonia Chaos Begins to Squeeze Spain\u2019s Financial Markets"},"content":{"rendered":"
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Catalonia Chaos Begins to Squeeze Spain\u2019s Financial Markets<\/span><\/a><\/h3>\n<\/header>\n
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Bank shares plunge. Money is already on the move.<\/strong><\/p>\n

Spain\u2019s biggest political crisis of a generation, which has led to the complete breakdown of communication and understanding between its government in Madrid and the separatist region of Catalonia, is finally beginning to take its toll on the country\u2019s financial markets.<\/p>\n

Spain\u2019s benchmark index, the Ibex 35, slumped nearly 3% following its worst day of trading since the Brexit vote last June. Spain\u2019s 10-year risk premium \u2014 the differential between the yield on its 10-year bonds and the yield on Germany\u2019s 10-year bonds \u2014 soared to 129 basis points. And that\u2019s despite the fact that the ECB continues to buy Spanish debt hand over fist.<\/p>\n

But it is the banks that have borne the brunt of the pain this week. On Monday, the first trading day after the independence referendum, they lost\u00a0\u20ac4.84 billion in market value. Over the past five trading days, shares of the two biggest Catalan-based banks, Caixabank and Banco de Sabadell, have plunged respectively, 9% and 13%.<\/p>\n

So tense is the situation that the CEOs of each bank felt compelled to release a statement today reassuring customers that they have all the means and tools necessary to protect their interests. Their contingency plans include the option of abandoning their base of operations in Catalonia and moving elsewhere \u2014 to Madrid in the case of Sabadell and Mallorca in the case of Caixabank.<\/p>\n

But it wasn\u2019t just Catalan banks that were caught up in today\u2019s rout. Important Spanish banks with somewhat less exposure to Catalonia also saw their shares plunge. Santander, Spain\u2019s only global systemically important bank, was down 3.8% on the day\u2019s trading; BBVA, Spain\u2019s second bank which has important operations in Catalonia after acquiring the failed saving bank Catalunya Caixa in 2015, fell 3.6%; and Bankia was also down 3.6%.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Catalonia Chaos Begins to Squeeze Spain\u2019s Financial Markets Bank shares plunge. Money is already on the move. Spain\u2019s biggest political crisis of a generation, which has led to the complete breakdown of communication and understanding between its government in Madrid and the separatist region of Catalonia, is finally beginning to take its toll on the […]<\/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":[16315,16314,117,5660,233,282,1849,968,9099,743,4255],"class_list":["post-26493","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banco-de-sabadell","tag-caixabank","tag-catalonia","tag-don-quijones","tag-ecb","tag-european-central-bank","tag-financial-markets","tag-independence","tag-secession","tag-spain","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26493","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=26493"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26493\/revisions"}],"predecessor-version":[{"id":26494,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26493\/revisions\/26494"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}