Spain's banking crisis flared up again

[tyz]

The banking crisis in Europe seems to flare up again. After problems in Italy, Spain's banks seem to have problems.

Spanish bank Santander took over struggling smaller rival Banco Popular which has suffered a sharp fall in its share price in the last week over fears about its liquidity situation.

Two small Spanish banks will be closely watched in the coming days after the fall of Banco Popular sparked fears over the strength of the sector.

One of those banks is Liberbank, which was formed in 2011 by the merger of three failed savings banks, had seen the value of its riskiest bonds collapse by 60 per cent in recent days.

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[merchantofzeny]

The banking crisis in Europe seems to flare up again. After problems in Italy, Spain's banks seem to have problems.

Spanish bank Santander took over struggling smaller rival Banco Popular which has suffered a sharp fall in its share price in the last week over fears about its liquidity situation.

Two small Spanish banks will be closely watched in the coming days after the fall of Banco Popular sparked fears over the strength of the sector.

One of those banks is Liberbank, which was formed in 2011 by the merger of three failed savings banks, had seen the value of its riskiest bonds collapse by 60 per cent in recent days.

It seems that the more southern EU members are usually the ones that have problems with their economy. I heard that in Italy years ago, they got to the point where you are limited to how much money you can withdraw from your ATM, which kinda sucks.

I'm curious what keeps causing them these problems.

[mindrust]

Italy, Portugal, Spain, Greece (obviously) are the weakest chains of EU.

All because of Germany.

Germany are enslaving those countries by giving them loans. When they can't pay it back, Germany gives them even more. They can't stop giving. ECB buys every Italian Bond there is for years. If Germany (ECB) ever stops buying, EU will collapse in a flash.

This can't end well

http://www.zerohedge.com/news/2016-11-29/brexit-redux-ecb-ready-buy-more-italian-bonds-if-referendum-rocks-markets
http://www.zerohedge.com/news/2017-05-05/italy-dependent-ecb-foreign-investors-dump-bonds-amid-capital-flight

[bitart]

Italy, Portugal, Spain, Greece (obviously) are the weakest chains of EU.

All because of Germany.

Germany are enslaving those countries by giving them loans. When they can't pay it back, Germany gives them even more. They can't stop giving. ECB buys every Italian Bond there is for years. If Germany (ECB) ever stops buying, EU will collapse in a flash.

This can't end well

http://www.zerohedge.com/news/2016-11-29/brexit-redux-ecb-ready-buy-more-italian-bonds-if-referendum-rocks-markets
http://www.zerohedge.com/news/2017-05-05/italy-dependent-ecb-foreign-investors-dump-bonds-amid-capital-flight

ECB has to buy those countries' bonds, because if those countries fails, the EUR currency can fail too, or can lose it's value agains USD and other major currencies (and it can weaken Germany as well). Southern countries know this, so they're not worried too much about the prudentiality of their fiscal policy, someone will always save them (if you remember Greece, their situation has been solved too, sooner or later, somehow).

[BitZonk]

Nice to see a non-bitcoin topic:) Personally I am euro bearish so I am glad to hear such news, although sentiment on euro is currently very positive (don't know why, it just is) so I am standing aside and watching.

[pitham1]

Nice to see a non-bitcoin topic:) Personally I am euro bearish so I am glad to hear such news, although sentiment on euro is currently very positive (don't know why, it just is) so I am standing aside and watching.

These are all pointers to why Bitcoin is superior to fiat. 
We aren't subject to the reckless policies of governments in power. I think bad banks should be allowed to fail. They should be shut down methodically, so that ripples are not felt by other market participants.

[veleten]

Italy, Portugal, Spain, Greece (obviously) are the weakest chains of EU.

All because of Germany.

Germany are enslaving those countries by giving them loans. When they can't pay it back, Germany gives them even more. They can't stop giving. ECB buys every Italian Bond there is for years. If Germany (ECB) ever stops buying, EU will collapse in a flash.

This can't end well

http://www.zerohedge.com/news/2016-11-29/brexit-redux-ecb-ready-buy-more-italian-bonds-if-referendum-rocks-markets
http://www.zerohedge.com/news/2017-05-05/italy-dependent-ecb-foreign-investors-dump-bonds-amid-capital-flight

if Italy, Portugal, Spain, Greece are the weakest links of EU
what about Estonia,Latvia,Lithuania? are they the strongest links ?
EU is bound to dissolve,only members benefitting from it are Germany,UK(not any more) and France (to some extent)

[Hydrogen]

Spain has many problems. Its youth unemployment for 19-24 age bracket has hovered around 50% for years.

The issue with banks is they gamble with derivatives which is not unlike betting on sports.

Sometimes, banks bet big on derivatives & lose as US banks lost prior to the economic crisis of 2008.

When banks lose & become insolvent they drag the economy of the country they operate in down with them.

[mindrust]

if Italy, Portugal, Spain, Greece are the weakest links of EU
what about Estonia,Latvia,Lithuania? are they the strongest links ?
EU is bound to dissolve,only members benefitting from it are Germany,UK(not any more) and France (to some extent)

Italy, Spain, Greece, Portugal have way more importance than any other country in the EU. It is because of the size of their economy and their geographical location.

Those countries you mentioned above are more Russian than European anyway If they leave EU, they can always join back to USSR.

They also don't have a healthy economy but we don't see them in the news everyday. They are in a bad shape but they know it and act accordingly. There isn't anything beyond repair there.  Mediterranean countries are aware of their situation  too but they are beyond repair. They are fckd.

You are right generally though. There are also countries like Bulgaria, Romania etc. They no good neither but like i said, even if they all disappear tomorrow, they can't damage EU as much as Italy alone.

[LeGaulois]

The crisis come from the boom in the 2000s, real estate was something good in Spain. The spanish kept building. They were building everywhere, all the time . it was a hot industry to jump in, as worker or as investor no matter. Everyone wanted to buy a house, even foreign people. But the wages remained very low while the price of real estate was flying off. So everyone was borrowing from the banks. As they lent a lot, the banks had to borrow in turn.

[cafucafucafu]

The banking crisis in Europe seems to flare up again. After problems in Italy, Spain's banks seem to have problems.

Spanish bank Santander took over struggling smaller rival Banco Popular which has suffered a sharp fall in its share price in the last week over fears about its liquidity situation.

Two small Spanish banks will be closely watched in the coming days after the fall of Banco Popular sparked fears over the strength of the sector.

One of those banks is Liberbank, which was formed in 2011 by the merger of three failed savings banks, had seen the value of its riskiest bonds collapse by 60 per cent in recent days.

Failing banks and weak economy after the Brexit in Europe is pretty widespread and definitely not limited to Spain. As others said, Greece and other EU nations are also demonstrating signs of fatigue, and there is almost no boom economies.

The crisis come from the boom in the 2000s, real estate was something good in Spain. The spanish kept building. They were building everywhere, all the time . it was a hot industry to jump in, as worker or as investor no matter. Everyone wanted to buy a house, even foreign people. But the wages remained very low while the price of real estate was flying off. So everyone was borrowing from the banks. As they lent a lot, the banks had to borrow in turn.

Does this sound familiar to anyone? 2008? Right now even? In america, china, australia, basically every megacity, prices of property is going up up up and people are getting themselves into debt to buy into property? I wonder how this is going to end up 

I wouldn't be surprised if crypto really becomes a safe haven for peolpe in the EU. Venezuelans are picking up bitcoin because of the economic crisis. IMO the ironic truth is that bitcoin will only be recognized when there is an economic disaster.

[pearlmen]

The banking crisis in Europe seems to flare up again. After problems in Italy, Spain's banks seem to have problems.

Spanish bank Santander took over struggling smaller rival Banco Popular which has suffered a sharp fall in its share price in the last week over fears about its liquidity situation.

Two small Spanish banks will be closely watched in the coming days after the fall of Banco Popular sparked fears over the strength of the sector.

One of those banks is Liberbank, which was formed in 2011 by the merger of three failed savings banks, had seen the value of its riskiest bonds collapse by 60 per cent in recent days.

Its not news that banks are having crisis as we have seen even in advanced countries where one bank is overtaken or even merged with another stronger bank. Its normal in business and its an everyday thing. The reason for that to happen is largely due to regulation such as recapitalization policy by the Central Bank which might be difficult for the smaller banks to meet up with. Other reason could be because box mismanagement on the part of the directors but what  I know is that if the Central Bank is strong there is no cause for alarm.

[matuson]

Very often the bankruptcy of small banks is fraud on the part of its owners. The demand for goods led to the debt crisis and falling demand for loans. Why the Bank's management strain if they can escape with the money. Maybe the reason for this.

[merchantofzeny]

if Italy, Portugal, Spain, Greece are the weakest links of EU
what about Estonia,Latvia,Lithuania? are they the strongest links ?
EU is bound to dissolve,only members benefitting from it are Germany,UK(not any more) and France (to some extent)

Italy, Spain, Greece, Portugal have way more importance than any other country in the EU. It is because of the size of their economy and their geographical location.

Those countries you mentioned above are more Russian than European anyway If they leave EU, they can always join back to USSR.

They also don't have a healthy economy but we don't see them in the news everyday. They are in a bad shape but they know it and act accordingly. There isn't anything beyond repair there.  Mediterranean countries are aware of their situation  too but they are beyond repair. They are fckd.

You are right generally though. There are also countries like Bulgaria, Romania etc. They no good neither but like i said, even if they all disappear tomorrow, they can't damage EU as much as Italy alone.

I have a relative in Italy. Years ago she mentioned people there has started committing suicide out of despair of the state of the economy. She had an employer that lost 2 businesses. And this was in Florence. I heard things are much worse way down south, especially Sicily.

What caused these countries to fall like this? Is this a hangover from the past? I mean, Italy sunk into meh status after the Renaissance and Spain and Portugal pretty much lagged after losing their empires and Greece was fucked hard by the Ottomans.

[mindrust]

I have a relative in Italy. Years ago she mentioned people there has started committing suicide out of despair of the state of the economy. She had an employer that lost 2 businesses. And this was in Florence. I heard things are much worse way down south, especially Sicily.

What caused these countries to fall like this? Is this a hangover from the past? I mean, Italy sunk into meh status after the Renaissance and Spain and Portugal pretty much lagged after losing their empires and Greece was fucked hard by the Ottomans.

Nope, their failure is mostly racial. They just can't keep up with the advancements of our age and they are easy going, addicted to have fun. Also no work discipline.

It is almost the same with the Americas. South sucks, north is fine. Do you think it is a coincidence? 

People lost their trust in Spain. Spanish Government borrowed so much money to fund their war but they didn't repay what they owe, so those people left Spain in drones and moved to more reliable countries like the Netherlands and Germany who can keep their promises. That's why Dutch Banks are considered highly reliable. (along with the Swiss and German Banks) They keep their promises. Ask Age of empires III if you don't believe me. 

The story is very long but you can read some of it here:

To fully understand the peculiarities of the history of the system of public finance, and that of the closely related system of private (international) finance and banking of the Dutch Republic, one has to view it in the context of the general history of the Netherlands and of its institutions, and of the general Economic History of the Netherlands (1500 - 1815). In contrast to that general history this is a sectoral history, concerning the fiscal and financial sector.

It is important to realize that those general histories differ in an important way from those of centralized Western European monarchies, like Spain, France, England, Denmark and Sweden in the early modern era. The Netherlands were highly decentralized from their origins in the Habsburg Netherlands in the late 15th century, and (other than the monarchies just mentioned) successfully resisted attempts to bring them together under the centralized authority of a modern state.

Indeed, the Dutch Revolt that gave rise to the Republic of the United Netherlands, effectively resulted from resistance against attempts by the representatives of king Philip II of Spain, the Habsburg ruler of the country, to institute such a centralized state and a centralized system of public finance. Where in other instances the modern fiscal system resulted from, and was made subservient to, the interests of a centralizing monarchical state, in the Dutch instance the emerging fiscal system was the basis of, and was mobilized in the interests of the defense of, a stubbornly decentralised political entity.

See? Decentralization fucking rules. Ask Dutchies. That's why ethereum is a shit coin. Fuck eth. Bitcoin master race.

Ironically, the Habsburg rulers themselves pushed through the fiscal reforms that gave the rebellious provinces the wherewithal to resist the power of the sovereign. Emperor Charles V needed to increase the borrowing capacity of his government to finance his many military adventures.

Debt debt debt, and non repaid. Rekt.
https://www.wikiwand.com/en/Charles_V,_Holy_Roman_Emperor
"Ruler of both the Spanish Empire from 1516 and the Holy Roman Empire of German Nation from 1519, as well as of the Habsburg Netherlands from 1506"

To that end it was necessary to put in place a number of fiscal reforms that would ensure that the public debt could be adequately serviced (thereby increasing the creditworthiness of his government). In 1542 the president of the Habsburg Council of State, Lodewijk van Schoor, proposed the levy of a number of taxes throughout the Habsburg Netherlands: a Tenth Penny (10 percent tax) on the income from real property and private loans, and excise taxes on beer, wine, and woollen cloth.[1] These permanent taxes, collected by the individual provinces, would enable the provinces to pay enlarged subsidies to the central government, and (by issuing bonds secured by the revenue of these taxes) finance extraordinary levies (beden in old Dutch) in time of war. Other than expected, these reforms strengthened the position of the provinces, especially Holland, because as a condition of agreeing to the reform the States of Holland demanded and got total control of the disbursement of the taxes.

Holland was now able to establish credit of its own, as the province was able to retire bond loans previously placed under compulsion as enforced loans. By this it demonstrated to potential creditors it was worthy of trust. This brought a market for voluntary credit into being that previously did not exist. This enabled Holland, and other provinces, to float bonds at a reasonable interest rate in a large pool of voluntary investors.[2]

The central government did not enjoy this good credit. On the contrary, its financing needs increased tremendously after the accession of Philip II, and this led to the crisis that caused the Revolt.

And the story goes on.

TLDR; those who have more work discipline always win in the long run. Southern dudes are worse bankers than northern dudes. That's it. What does Italy, Spain and Greece have in common? Their banks suck.

[audaciousbeing]

I see another round of financial crises in our eyes all over again because its seems all these people that have been saddled with the responsibility of managing this economy of ours are just being successful at running it to the ground. The difficulty banks are facing is not limited to Spain alone but other countries as well and those ones that seems they are still standing are even grasping for breath.

[OROBTC]

...

I believe mindrust has explained the problems of European banks well.

We are in Italy now on a visit.  The whole economy seems to be going down for the count.  My wife's friend here (N. Italy) is somewhat wealthy and well-connected, yet is very pessimistic even in the "wealthy part of Italy.

The lack of action re illegal immigration might wind up being what finally kills off the European economy (above and beyond the banking discipline problems mindrust mentioned).  Very sad.

[Gotottack]

...

I believe mindrust has explained the problems of European banks well.

We are in Italy now on a visit.  The whole economy seems to be going down for the count.  My wife's friend here (N. Italy) is somewhat wealthy and well-connected, yet is very pessimistic even in the "wealthy part of Italy.

The lack of action re illegal immigration might wind up being what finally kills off the European economy (above and beyond the banking discipline problems mindrust mentioned).  Very sad.

Probably another global recession bound to happen? I don't think there is a country that could say now that they are wealthy and there is no down for the turns. Anyway, economics wise. People need to spend more and avoid debts. If there are too much debt in the economy then it would seem that everybody owes everybody but if paid it would result to everybody without a debt.

[Hazir]

It is only matter of time when we will have another global recession/economic crisis. The question is: where it will orginate this time around?
From USA, where stock market is overvalued and bloated to the limit, in Europe when we have social crisis and weak economy of some countries can collapse?
The weaker standard fiat economy is the better for Bitcoin, I don't trust banks anyway.

[bitcoinvestor]

Spain has many problems. Its youth unemployment for 19-24 age bracket has hovered around 50% for years.

The issue with banks is they gamble with derivatives which is not unlike betting on sports.

Sometimes, banks bet big on derivatives & lose as US banks lost prior to the economic crisis of 2008.

When banks lose & become insolvent they drag the economy of the country they operate in down with them.

Banking crisis is not merely the problem of the bank itself but also economic problem of the country. When the economic growth banking will be healthy too in case there are missmanagement in the bank industry. In Indonesia , government regulate to tax account owner who has more than 200 milion rupiah or the same as 15000 USD bank account. It is small amount of cash for businessman but the governmnet is in crisis so they make policy that not profit to bank customers. Banking policy is only following state policy. That's to bad for me Indonesian people so there are many people make multiple bank account and split their deposit.