{"id":28817,"date":"2017-12-13T07:59:12","date_gmt":"2017-12-13T12:59:12","guid":{"rendered":"http:\/\/olduvai.ca\/?p=28817"},"modified":"2017-12-13T07:59:12","modified_gmt":"2017-12-13T12:59:12","slug":"stressful-year-ahead-for-spanish-banks","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=28817","title":{"rendered":"Stressful Year Ahead for Spanish Banks"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2017\/12\/12\/another-stressful-year-ahead-for-spanish-banks\/\">Stressful Year Ahead for Spanish Banks<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>The \u201cspillover effects.\u201d\u00a0<\/strong><\/p>\n<p>Just how much more stress Europe\u2019s banking system can bear will be one of the big questions of 2018. This year was already a pretty stressful year, what with two major Italian banks being put out of their misery while, another, Monte dei Paschi di Siena, was brought back from the dead. In Spain, 300,000 shareholders and subordinate bondholders mourned the passing of the country\u2019s sixth biggest bank, Banco Popular, which was acquired by Santander for the measly price of one euro.<\/p>\n<p>Now, a whole new problem awaits. A report <a href=\"http:\/\/www.eleconomista.es\/banca-finanzas\/noticias\/8800969\/12\/17\/El-21-de-la-banca-espanola-en-la-encrucijada-ante-los-test-de-estres.html\" target=\"_blank\" rel=\"noopener\">published<\/a> by Spain\u2019s second largest lender, BBVA, has warned about the potential impact on the sector\u2019s profitability of new rules on provisions due to come into effect in early 2018.<\/p>\n<p>Until now, banks only had to report losses when loans began deteriorating \u2014 i.e. when the defaults began. But the introduction in January of a new accounting rule, known as IFRS 9, will force banks in Europe to provision for souring loans much sooner than at present. One direct result will be that banks will have to hold more capital on their books, and that will have a detrimental impact on their profits.<\/p>\n<p>If next year\u2019s stress test by the ECB sets the same macroeconomic conditions and parameters as those used in 2014, banks holding just over one-fifth of the market share in Spain \u2014 measured in risk-weighted assets \u2014 would have to undertake provisions exceeding 200 basis points, the BBVA report predicts. That would leave some entities with a solvency rating lower than 9% \u2014 i.e., on the brink or even below the minimal level required by European regulation.<\/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>Stressful Year Ahead for Spanish Banks The \u201cspillover effects.\u201d\u00a0 Just how much more stress Europe\u2019s banking system can bear will be one of the big questions of 2018. This year was already a pretty stressful year, what with two major Italian banks being put out of their misery while, another, Monte dei Paschi di Siena, [&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":[2229,63,5660,233,281,282,1464,743,4255],"class_list":["post-28817","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banking-system","tag-banks","tag-don-quijones","tag-ecb","tag-europe","tag-european-central-bank","tag-italy","tag-spain","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28817","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=28817"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28817\/revisions"}],"predecessor-version":[{"id":28818,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/28817\/revisions\/28818"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=28817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=28817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=28817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}