THE other night, Richard Quest from the CNN International’s Quest Means Business, was in Madrid for a live broadcast of his popular financial programme.

Standing on a street corner in the Spanish capital, the high-spirited Liverpudlian journalist who is big in American broadcasting interviewed BBV Executive Chairman Francisco Gonzalez, who sounded as if he had suddenly been pulled aside for an on-camera chat.

Gonzalez praised the painful sacrifices Spaniards have endured to get the economy rolling. He said the banking industry was stronger than ever, even though Spain had to seek a €41.3 billion loan from its European partners in June 2012 to bail out its ailing financial institutions.

BBV was one in a group of banks that was solvent at the time and needed no additional capital.

Buoyant about the direction of the Spanish economy, the BBV chief said one of the problems his bank is now facing is that it has a lot of money to lend but no takers. In other words, Spaniards – and especially bankers – are still wary about the economy, and financial institutions are still cautious about handing out cash to budding entrepreneurs.

The economy is still on hold despite the fact that consumer spending is on the rise. Why couldn’t Gonzalez just explain this?

Less than year before his death, Banco Santander chief Emilio Botín was in New York to formally add his bank’s brand name to a chain of US lenders he acquired some years back. Botin was full of himself at the NY stock exchange, telling everyone that money is now flowing in Spain. His ‘used-car-salesman’ pitch was a great contrast to his usually quiet manner.

Spanish banks have not done enough to replace what they milked during the boom years, when home loans were handed out in similar amounts to the number of bowls now served in soup kitchens across the country.

If there is enough money to lend, as Gonzalez says, then the private sector should take priority. But that won’t occur because there still exists that unspoken lack of confidence.


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