Stealth Bailout of 2 Franken-Banks Now Happening in Spain

Wolf Street ^ | October 1, 2016 | Don Quijones

[Lorianne]

Obscured somewhat by the spectacular antics of Deutsche Bank, there appears to be another bailout of two of Spain’s franken-banks: mostly state-owned Bankia and wholly state-owned Banco Mare Nostrum (BMN). The news was released so quietly that even in Spain barely a living soul is aware it’s happening.

For the moment, BMN is completely state-owned, after its four constituent state-owned parts — Caja Murcia, Caixa Penedès, Caja Granada y Sa Nostra — were rescued by Spain’s taxpayers and lumped together for the modest price of €1.6 billion in 2010. But by the end of this year all that was supposed to have changed. Plans had been drawn up for an IPO of the bank, but in the current environment, with banks falling like flies all over Europe, investors refuse to go near it.

Hence the merger, which despite only being in the “study stage,” has already received the blessing of Spain’s caretaker government, Spain’s central bank, and Standard & Poor’s, which has promised not to downgrade Bankia’s credit rating after it has absorbed BNM’s assets and liabilities. The merger will also no doubt enjoy the undivided support of the ECB: Mario Draghi, announced just a few days ago the urgent need for greater concentration and consolidation of Europe’s banking sector.

[MichaelCorleone]

Can’t they just import millions more muslim refugees? That worked quite well in Germany.

[webheart]

I knew Al Franken was up to something!