Wednesday, May 2, 2012

ECB Lending to Spanish Banks

Despite European Central Bank president Mario Draghi's contention that no more money lending will be needed for Spain, it is difficult to see any other choice. Spain has counted on central bank money for months. With Spain's economy slowing and the tax base is shrinking, there is no way that Spain can sustain its debt structure, expect with further ECB bailouts.

To make matters even worse, Spanish banks are stuffed with government paper and it will be difficult for them to take on much more.

(Charts via Yardeni)

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