MADRID | Everyone seems to skip the nagging fact that stress tests undertaken by Oliver Wyman and Roland Berger only focused on credit risk. Thus, the extra capital requirements only reflect shortcomings in the banking book due to potential bad loans. But any serious test has to embody securities risk in general and sovereign bonds in particular. The European Banking Association has performed it every time it has put European…
MADRID | The Euribor, at which most home mortgages in Spain are referenced, has fallen 0.001 percentage point in its daily rate down to 1.044 percent. This is the tenth consecutive occasion in which the inter-euro zone banking rate decreases to a historical minimum. Its average level in July was of 1.127 percent, one point less than a year ago, causing a significant reduction of mortgages’ total debt, on both new ones…
By Julia Pastor, in Madrid | Problems for Barclays are multiplying. Added to the Libor scandal in the United Kingdom and the United States, it has been revealed on Monday morning that the Spanish ministry of Finance is performing a fiscal investigation on the bank’s national subsidiary practices of dividend or coupon tax fraud. According to the daily Expansion, which has the scoop, Barclays Capital would have started to avoid…
MADRID | One-off cuts and further squeezing measures have been taken in a desperate attempt to avoid budgetary discomfiture. By mid-term central government deficit had already attained its full year target, not to mention a regional and local performance no one knows for sure where it stands. A drastic brake to such blatant slippery became an unavoidable option. The markets and Brussels have done the rest. Free-running risk premium has not…
LONDON/MADRID | Finance-wise, Italy is unnerving some of its neighbours in the periphery of the euro zone. Particularly in Spain, government officials wonder aloud about the unfairness of the whole situation: while yields of the Spanish 10-year sovereign bonds time and again cross the 7 percent frightening barrier, Italy managed last week to sell €5.25 billion in debt of various maturities at much lower interest rates in most of the…
By Tania Suárez, in Madrid | Things are getting even more difficult in Spain. First, the recently announced measures of adjustment, then the protests from the mining industry and now it is the turn of the Spanish regions. Minister of finance Cristóbal Montoro said that he wouldn’t be as permissive as Brussels has been with Spain; that the government will not extend the period for the regions to achieve the fiscal…
MADRID | The Inditex Group announced this week that it would completely absorb the increase in VAT from 18% to 21% that the Spanish government will carry out as one of its austerity measures to sustain the State's levels of income. But Inditex said it would not increase the prices of its products. In fact, this counter-price policy will extend to all of the Inditex Group’s chains, from Zara, to Pull&Bear, Massimo…
MADRID |Fernando G. Urbaneja| Premier Mariano Rajoy did not expect the economic picture to be that overwhelming, although it was predictable, nor former premier Mr Zapatero could believe in May 2010, that he was meant to play the role he so reluctantly played. Both of their reactions are part of Spain's problem: government leaders, alleged leaders dragged from the events who have to act against their beliefs. Ms Rosa Diez (former…
MADRID | The Spanish government has adamantly refused to accept any macro conditioning that might portrait it as falling under a full-fledged intervention. Markets hold a different view witnessing how recommendations advanced by the Brussels bureaucracy are taken to the line. VAT increase stands as the paramount example of an ill-judged proposal Spain is implementing under euro-pressure. Wasn’t the party now in power forcefully opposed to a similar measure not so…
how can i get my ex back By Tania Suárez, in Madrid | The president of the Spanish government Mariano Rajoy had a purpose this morning. He wanted to make a decisive move, not just a simple declaration of intentions. He wanted to get out of his hideout to take the reins of Spain. And he has done it. During a speech in a plenary session of the Congress this…