Tags: spain | banks | credit | trouble

Spanish Banks Under Huge Pressure

By Frank McGuire   |   Tuesday, 15 Jun 2010 09:51 AM

Spanish officials have admitted that the country's banks and companies are having serious trouble obtaining credit, illustrating the hurdles European nations face in winning back investor confidence after the euro’s recent plunge.

The Wall Street Journal reports that Spanish banks face increasing difficulty borrowing in the interbank market. Such lending is an important source of short-term liquidity.

Separately, Spain's Treasury on Tuesday raised 5.2 billion euros ($6.37 billion) at its 12- and 18-month T-bill auction but at a substantial premium compared to the same auction a month earlier. That raises doubts over the country's credit rating.

The gap between Spain’s currently high rating and the reality of a poor auction signals the return of the “bond vigilantes,” speculators who try to corner governments that play fast and loose with budget realities.

"It . . . begs the question how Moody's can rate Spain triple-A when you have an auction result like this. This must now put pressure on Moody's to downgrade Spain," Marc Ostwald, bond strategist at Monument Securities in London, told Reuters.

© 2017 Newsmax Finance. All rights reserved.

1Like our page
2Share
StreetTalk
Spanish officials have admitted that the country's banks and companies are having serious trouble obtaining credit, illustrating the hurdles European nations face in winning back investor confidence after the euro s recent plunge. The Wall Street Journal reports that...
spain,banks,credit,trouble
173
2010-51-15
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved