Do not expect credit to start flowing immediately in the eurozone

There are some reasons for that: credit demand is weak, but also interest rates for banks are much higher in Spain than in other eurozone countries. Spanish banks are assuming abnormally high premium risks and that is not going to change after they are told that a stressed situation is well covered.

Interest rates to lending money must be high to compensate the non performing assets. This shows that Spanish lenders still have many dirty assets, although they would not mean bankruptcy.

 

 

 

About the Author

Miguel Navascués
Miguel Navascués has worked as an economist at the Bank of Spain for 30 years, and focuses on international and monetary economics. He blogs in Spanish at: http://http://www.miguelnavascues.com/

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