Bank bail-out won’t end Spain’s property nightmare…(Or Anything Else…)
With Spain’s property bust far from bottoming out, any capital injection being discussed by European leaders for Spain’s banks is merely a sticking plaster.
By James Quinn
09 Jun 2012
Just over a year ago, Bob Diamond went to Spain. The chief executive of an international bank visiting a nearby foreign country in which it has exposure would not normally a story make.
But in this instance, it was no ordinary trip. For in the penultimate week of May 2011, Diamond, only five months into the top job at Barclays, went knocking on the door of then Spanish prime minister, Jose Luis Rodriguez Zapatero.
Reports as to what the two men discussed vary. Initial reports suggested that the two discussed the country’s ailing caja sector, with the aim of potentially rescuing some of the small savings banks.
I was later told by well-placed sources that in fact the two discussed many more issues, not least the potential of Barclays getting on to the advisory ticket for the partial sale of the country’s state lottery, famous for its “El Gordo” prize draw.
In any case, what the two discussed is not of vital importance to the outcome. What is known is that within no more than four months of that visit, Barclays was attempting to bolster its position on Spain’s fragmented banking high street by looking at four of the cajas.