Spain's banks, awash in bad loans after a real estate boom went bust, are at the heart of the euro zone debt crisis because markets fear a state bailout would put a severe strain on the country's already stretched public finances.
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Then came plans for the adoption of the euro in the late 1990s, and again the prospect of an ascendant Europe offered a gilded opportunity for Spain. Borders were disappearing. The euro helped inflate a booming real estate bubble, as capital migrated ... See all stories on this topic »

New York Times

Bankias financial hole may reach 8 billion euros, on top of the 10 billion it needs to set aside to cover potential losses on real estate assets, newspaper Expansion said. Moodys on Thursday downgraded 16 Spanish banks, citing the recession, ...
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Spanish Prime Minister Mariano Rajoy took sweeping measures last week to shore up banks with piles of bad real estate debt and other non-performing loans. But the rescue attempt appeared to have left investors unimpressed. Added to Spain's troubles and ... See all stories on this topic »

UPI.com

The ratings firm noted Banco Popular Espanol's viability rating is also sensitive to a further weakening of the Spanish economy, which is undergoing a recession, high unemployment and additional deterioration of real estate prices in Spain.
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Concern about the possible expense to the government of bailing out banks' real-estate losses has helped to drive up the country's borrowing costs. “Spain is not comparable to, for instance, Ireland, which had a banking sector many times larger ...
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Popular's VR is sensitive to a further weakening of the Spanish economy, which is undergoing a recession, high unemployment and additional deterioration of real estate prices in Spain, a sector to which Popular is highly exposed.
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“From a macroeconomic point of view, I think the Bankia crisis has to be understood as another stage, not the final one, to stabilize Spain's financial system and to cleanse the real estate bubble,” says Josep Oliver, applied economics professor in the ... See all stories on this topic »

Christian Science Monitor

Moody's blamed its downgrade on "adverse operating conditions, characterized by the renewed recession, the ongoing real estate crisis and persistent high levels of unemployment" in Spain. "It's not going to go down in history as a great day for Spanish ...
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Real Estate Collapse Moody's announced in April that it would start downgrading banks around the world. After beginning with Italy and Spain, the review will move on to companies including Austria, the UK and Germany. US investment banks may have their ...
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