Who will be the bag holders this time?
“There will be no Bad Bank in Spain, and we will establish procedures that will not be burdensome for taxpayers.” Those were the infamous words of Spanish PM Mariano Rajoy during the first few months of 2012. Months later Spain’s bad bank, Sareb, was born, and Spanish taxpayers were left holding the tab for the biggest bank bailout in Spanish history.
When Sareb was created, its creators assured Spain’s taxpayers that their money would be returned; some even claimed that the State would make a tidy profit from the operation. Since then, the losses have kept piling up. It is estimated that over €2.1 billion of public funds have been poured into the bank so far and a further €2 billion was provisioned for this year’s accounts alone.
Now, Banco Popular, Spain’s fourth biggest bank and, pound for pound, the largest owner of toxic assets in the country, is planning to spin off its own bad bank early next year, with around €6 billion euros of highly dubious real estate “assets”…
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