Debt of Spanish banks to the ECB has peaked to 375 Billion Euros

Aug. 16, 2012 - PRLog -- Net debt of Spanish banks to the European Central Bank (ECB) has yet crossed a historical threshold in July, reaching 375.5 billion euros, according to data from the Bank of Spain released Tuesday. This figure, which is also an indication of the ability or inability of Spanish banks to use the market, instead of the ECB, to finance, string of record highs since January.
The use of Spanish banks to the ECB, which had risen to 132 billion euros in July 2010, had been steadily declining, down to 42 billion in April 2011. But since July 2011, it increased again. He jumped another 10.2% between June and July, from 337.2 to 375,550,000,000 euros. He had already climbed 17% between May and June and 9% between April and May.
A new aid plan to 100 billion euros

The amount was partly boosted by the injection of liquidity by the ECB, which was conducted in December and February 2 lending over three years , at attractive rates, banks in the euro area. The first attracted over 500 banks amounting to 489 billion euros, the second 800 banks for 530 billion euros. This injection of funds was to help banks, which have difficulty in raising finance on the markets, in a general climate of distrust.
The ECB is considering a new purchase of Spanish and Italian debt but under strict conditions and if the requesting country. Spanish banks, some of which are very exposed to the stricken property sector, have been the subject of a European aid plan to 100 billion euros on July 20. A first tranche of 30 billion could be released shortly. Furthermore Bankia, which has requested assistance from 23.5 billion euros, CatalunyaCaixa, Novagalicia and Banco de Valencia were also nationalized because of their serious financial difficulties.
The situation in Spain it getting worse in recent weeks: the difficulties of the Spanish regions, the alarmingly high rates achieved by the ten-year bond ( close to 7% in July ), added to the dramatic deterioration of labor market, fueling rumors about a possible bailout of the global economy . Brussels still hopes that the bank bailout will prevent this. "A complete rescue of Spain (400 billion) and its contagion after Italy (probably 700 billion euros) are unaffordable for the euro area, as everyone knows," said Daniel Pingarrón , an analyst at IG Markets in an article in Les Echos . He believes that much of this panic comes from Europe: "The reality is that many investors think that the possibility of rupture of the euro area increases more»
SOURCE AFP

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