Banco Bilbao Vizcaya Argentaria SA, Spain’s second-biggest bank, reportedly has been unable to renew about $1 billion of short-term U.S. commercial paper since the beginning of this month.
BBVA’s difficulties come amid the debt crisis that is roiling Europe. Investors are worried that Greece’s woes will soon spread to Portugal and Spain.
During the weekend, Spain’s government had to seize a small savings bank, CajaSur.
As for BBVA, it still has access to substantial funding and deposits in Europe in addition to about $9 billion in U.S. commercial paper, The Wall Street Journal reports.
Spanish bank shares have tanked this year, with investors worried about the strength of economic recovery and the government’s ability to trim the budget deficit.
The government forecasts the deficit will total 9.3 percent of GDP this year.
BBVA shares have slumped 36 percent since Jan. 1, though the bank registered a profit of 1.2 billion euros ($1.5 billion) in the first quarter.
Banks across Europe are suffering from Libor’s rise to a 10-month high. Libor – the London Interbank Offered Rate – is what banks charge each other for short-term loans.
The Libor increase spells bad news for the global economy and credit markets, experts say.
"The direction is telling you where the economy is heading. It's very bad," Michael Pento, chief market strategist at Delta Global Advisors, told CNBC.
"We didn't learn much from the 2008-2009 credit crisis.”
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