The data out from Spain this morning should be one serious wake-up call for anyone exposed to Europe. The fourth largest economy in the Eurozone is getting hammered and for anyone that has doubted that they will need a full scale bailout; think again. The numbers are a disaster. Deposits at the Spanish banks dropped by a record amount in July, -$93 billion which is a decline of -4.7% in just one month. On a year-over-year basis the decline in deposits is 12.0% but the trend in loss of deposits is escalating rapidly. The total banking deposits in Spain are $1.51 trillion we are told and the loss in deposits is 56.4% on an annualized basis which, if this trend continues, would effectively wipe out the capital of each and every bank in Spain. With an economy that has shrunk to $1.3 trillion the drop in bank deposits represents a 6.6% loss of capital to support the economy. This is not a leak, as reported by some in the Press, but a bank run. Spain also reported out for June bad loans at 9.4% ($205.45 billion) which is the highest on record as reported but it is also a number which may not be believed!
[...]
More: http://www.realistnews.net/Thread-spanish-bank-runs-several-outlets-reporting-on-bank-runs
No comments:
Post a Comment