“Bad loans” in spain reach record level

This figure is the highest in the euro crisis country since the surveys began. The increase means that the effect of creating a "bad bank" has largely fizzled out.

In november 2012 and january 2013, spanish banks had ceded bad real estate loans to the state run-off company sareb ("bad bank"). This temporarily led to a slight decline in loan defaults at the banks. According to central bank data, spanish banks had a loan volume of 1.52 billion euros in june. Of which loans of over 176 billion euros were considered "bad". This is the category to which the central bank assigns all loans that have not been serviced for three months.

Economic expert claudia buch sees "a massive problem" in the balance sheets of banks in euro crisis countries in general. There are many and high non-performing loans, she told the "leipziger volkszeitung" (tuesday). The banking sector is still nowhere near stable enough "to cushion major macro-economic risks". The poor structure of the loan portfolio makes it very difficult for these banks to borrow, said the president of the halle institute for economic research (IWH).

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