El rescate de bancos españoles presenta problemas serios

PARIS, March 7, 2008 (LPAC) -- Certain Spanish banker are suspected of having created securities and SIVs solely for the purpose of obtaining cash from the European Central Bank (ECB), the Frankfurt correspondent of the French daily Les Echoes reported, picking up on a story already reported by EIR's European correspondents and published on EIR websites. The paper quotes Adam Slater, of Oxford Economics, as saying "The worries are on the fact that, in certain countries, banks are creating SIVs whose only purpose is their use as collateral at the special discount window of the ECB and to use these loans to prop up their financial deficits."

While the global securitization market has ground nearly to a halt in recent months, the volume of asset-backed securities (ABS) being used as collateral for loans from the ECB has been climbing, with ABS rising since September to 215 billion euros, or 17% of the collateral provided by borrowers to the ECB, up from 12% in 2006. Special attention is given to Spain, where securitization rose massively over the fourth quarter of last year. Since last September, the Spanish banks alone represent 9% of the volume of refinancing conducted by the ECB, whereas they comprised only 4-5% before then.

This reality is disconcerting, especially if a real estate bubble explodes, says Les Echos. Slater claims such an explosion would cause huge losses to the banks which could devaluate the value of their collateral deposited at the ECB. Then the ECB would be forced to require the banks to give more, and higher-valued, assets as collateral.