James BryceSPAIN’S economic woes have taken another turn for the worse after 16 of the country’s banks were downgraded.
Ratings agency Moody’s took the decision citing the Spanish government’s reduced ability to shore up the banks.
Reports suggested that customers had withdrawn as much as €1 billion from Bankia, sparking a drop of 30 per cent in the share price of Spain’s fourth largest lender, although this was later refuted.
“It is not true that at this time a flight of deposits from Bankia is taking place,” said Fernando Jimenez Latorre, the deputy economy minister.
In a statement sent to Spain’s stock market, Bankia attempted to calm customer fears: “Bankia’s clients can be absolutely calm about the security of the savings they have deposited.”
Among the bank’s to be downgraded were Banco Santander, along with Santander UK.
There is no doubt at all that the Spanish banks have a big problem but so do all the other banks in the eurozone. I am not convinced that these rating agencies are not making the situation worse and what did the banks do before we had these companies???
I do believe a lot of the crisis is being made worse by speculation and scare mongering. We will all suffer more hardship than we already are once Greece leaves the euro but come on it’s all getting a bit silly now.
If the rumor that there was a run on Bankia by its depositors is true, it’s nice to know that scared lemmings will create a self-fulfilling prophecy suffered by those who remained calm after nationalization and rewarding the frightened sheep who precipitate Bankia’s fall because the lemmings removed their funds from it, letting fear and selfishness inflict on others precisely what they wanted to avoid themselves – loss of their money. Le plus ca change . . . (1929 in the U.S., anyone?)