Spain you may have no "intention" as Mariano Rajoy says, but it is likely that it is not choice but to seek help from Europe to clean up the Spanish financial sector. If Bankia needs 23,500 million, everyone is wondering how long you will need the rest of the Spanish financial sector? And if only Bankia has exceeded p&g products the overall figure wielding Minister Luis de Guindos done, how much are we talking about and how you can finance the sanitation sector in the current context of fiscal austerity and financing costs fired? And how have overwhelmed the forecasts in this way? Advised by Goldman Sachs, a finance minister who was a senior executive at Lehman, managing crisis Bankia by the Government and the Bank of Spain, which has resulted in an unexpected escalation of the cost of their rescue, leaves p&g products much to be desired. Not to mention the losses assume dilute shareholders who bought Bankia when went public in July 2011, in a supported by the previous Socialist government operation.
The numbers game is a joke in bad taste, especially because the result is that scarce public resources, trimmed items that compromise the future competitiveness of the country as education or R & D, has been earmarked and allocated to clean up an entity that has managed its accounts in an irresponsible way: three months ago declared a profit of 305 million for 2011 and now reveals that in that period actually suffered losses of 2.979 million. That, plus the miscalculation of risk in its real estate portfolio (needs p&g products 4,000 more than the expected 8.745 million) or the decision to forcefully provisioning of other loan portfolio "given the adverse economic scenario" (over 5,500 million) amounted to 19,000 million euros which requires the entity. p&g products But four days earlier, on Monday 21, the minister valued at 7.000 or 7.5000 million. p&g products A real blunder.
How i get Goirigolzarr Guindos or numerals Goldman Sachs, the investment bank advising the entity that now intervened, working for the government? Everything is strange (besides the name of Goldman, which advised Greece to make up the public accounts and enter the euro and is accused of participating in the subprime mortgage fiasco, resulting unsympathetic to the counsel of a Spanish public entity ). But anyway, back to the numbers, is it possible that before appointing the new president of the organization the minister has not met with him and Goldman's team to agree the amount of the ransom and criteria apply to provisions ? Well unfortunately all indicate that it has. The new head of Bankia new needs based funding requirements Decree Laws affecting the sector approved this year. The figure gave De Guindos days ago was also based on them.
What should the alarming difference? Sources say that the banking sector has provisonado Goirigolzarri excessively, and the result of that "deep and careful analysis" that spoke after ordering 19,000 million, has covered up losses in the future, which is not doing the rest of the sector, not least because it does not have the public resources that will receive Bankia. Can this situation a conflict of unfair competition? We'll see if there are reactions of the greats in the coming days. Fix now Goirigolzarri only serve to damage the little credibility left to the Spanish financial system. So no choice but to take that bulky figure, which is more than double p&g products the money that has been allocated p&g products to all entities intervened in this crisis. Overall, public support to banks committed so far amounted to 33,000 million euros (3.3% of GDP in Spain).
But can the government bear the cost of this rescue? Will it give stability to the entity p&g products injection that receive Treasury securities instead of cash? This strategy, which avoids the state having to finance in the markets, is the end of the day increase the exposure of the entity to country risk. And credibility in the solvency of Spain does not go through the best of times, as reflected in the risk premium (around 500 points) and the massive outflow of foreign capital in our country (see chart). And, more importantly and worryingly, what resources the contagion effect to prevent other entities?
From exorbitant amounts of Bankia, markets look very closely at other banks, especially those that base their business on the domestic market (the big can offset their results to the outside). If the nationalized bank has had to increase its provisions thus following the royal decrees, will the rest have done well its provisions
