Daily Archives: 9 June 2012
It’s not being called a bailout but it’s difficult to see what else to call it when Spain is getting around €100 billion in favourable term loans from the Eurozone to support the country’s banks. Economy minister Luis de Guindos says that the aid is for the financial system rather than the economy, and denied that it was a “rescue”, but Spain’s banks will now be audited to determine the exact amount of money needed.
published by Jeremy:
It appears that Spanish banks will stoop as low as they have to in order to get customers to invest in one of their ‘products’. Here is a disturbing report of a bank selling a complicated product to an elderly woman who, as seen by the thumbprint where the signature should be, is illiterate. The bank sold her something apparently very simple – invest €6000 in this savings account, and you get good and fixed interest from it. You can withdraw your capital at any time. This is in fact a blatant lie. The ‘product’ is what is known as participaciones preferentes. It is in fact an annuity, where you have no access to your capital. The ‘product’ can be sold on and in theory you could get its value back. In practice, there might not be a buyer and the market price could be well under the investment you made. Not only that, the ‘product’ is not secured, so that if the bank goes bust, you lose the lot.