The Spanish IBEX is falling 3%+, falling sharply over the past hour after Spanish authorities said they want higher loan loss provisioning against bad debt from the country’s banks, meaning a further shrinking of the banks thru asset sales and more dilution if equity needs to be raised. The IBEX is again testing the lowest level since ’03 as Banco Santander and BBVA are both down about 5%. Bankia is down for a 6th straight day by another 3.5%. In response, the Spanish 10 yr yield is back above 6% and 5 yr CDS is wider by 5 bps to 515 bps.
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