The Slog has been saying for some time now that Spanish banking instability is as important as its poor sovereign access to the bond markets. I’ve also posted on several occasions to record massive deposit withdrawals in the sector.
Daily Telegraph, 22nd September 2012:
‘A bank-by-bank test of financial stability due next Friday is expected to conclude that Spain’s lenders are dangerously over-burdened with toxic debts and need to be recapitalised, restructured or shut down. The stress test is expected to show a dramatic deterioration since the previous tests were carried out at the beginning of the summer which suggested a €60bn cash injection would be the worst-case scenario.’ Continue reading