Spanish banking system teetering

Rick Moran
A big credit downgrade for 5 of Spain's largest banks as well as the largest government bail out of a bank in Spain's history has shaken the entire banking system and threatens the Spanish economy. LA Times: It's not looking good for the Spanish banking system. Standard & Poor's just slashed the credit ratings of five banks and said the country is headed into a double-dip recession. One of them, Bankia, just asked the government for 19 billion euros in aid - a roughly $23.8 billion boost. That makes it the largest bank bailout in Spain's history. Combined with escalating concerns that Greece is about to execute its so-called Grexit from the euro currency, the news is doing nothing to alleviate the heightened anxiety in the euro zone. Standard & Poor's, which caused market shockwaves last summer when it downgraded U.S. debt, said the Spanish banking sector was vulnerable to turbulence in capital markets because it relies heavily on foreign funding. The ratings agency...(Read Full Post)

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