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The Bank of Spain had chosen two consultants so that they value the Spanish banks’ assets.

The purpose of this evaluation is to “increase transparency and definitively dispel doubts about the valuation of bank assets in Spain”, Economy Ministry sources said.

De GuindosThe independent consultants selected are the German Roland Berger, and Oliver Wyman of the United States. Oliver Wyman has a dark point on his curriculum as he classified Anglo Irish Bank as the best in the world in 2006, just two years before this bank was nationalized.

Economy Minister Luis de Guindos refused on Monday any further serious regression in home loan defaults.

The performing loan ratio for mortgages currently stands at 2.8 percent, compared with 21 percent for credit to the real estate sector. The banking system’s loan portfolio is currently around 1.76 trillion euros, of which 656 billion is in the form of mortgages to individual homeowners and around 310 billion to property developers. In a decree approved earlier this month, the government increased provisions for loans to developers to up 45 percent of the value of the credit.
...continue reading "Spanish Banking System under exam"

Excellent article examines German and European Crisis

"The problem here is simple and everyone knows the story by now. Germany benefited from a weak Euro relative to what it otherwise would have experienced had it not been a part of the EU.

Their growth and exports skyrocketed and the lesser nations from an economic and financial standpoint (often referred to collectively as the PIIGS) borrowed from Germany essentially to finance current account deficits as they took advantage of much lower interest rates due to their affiliation with Germany via the Euro.

These PIIGS lived up to their name in eating up every source of financing they could."

Its conclusion:

"You cannot borrow more than you can pay back and if you do, you will pay for it eventually either via war, severe or hyperinflation, deflation, depression etc.

The market won’t disappear and we will get back to the “good times” eventually. However, the 90s were an aberration where everyone made money like in the roaring twenties, and we all know what happened there.

We have a solid 5-10 years of pain before we can get our house in order and get back to a “normal” economy, if there is such a thing".

seekingalpha.com