Monday, March 30, 2009

As I’ve reported a few times, there’s a widespread view here that, generally speaking, the Spanish banks are sounder than any others And that, specifically, Banco Santander is as good a bank as you could get. All this strength and stability, it's said, stems from the learning of lessons in the last banking crisis of the early 90s. Nonetheless, there are one or two sceptics/skeptics around and it’s now fair to ask whether we’re seeing the first brown shoots of winter in the Spanish banking industry. For today saw the first banking rescue here, with one of the regional savings banks - or cajas - being taken over by the Bank of Spain, after a ‘fusion’ with another caja aborted. Personally, I suspect it’s true the Spanish banks avoided some of the sins of their international brethren but, at the same time, there probably was room for error and misplaced creativity during the carpetbagger years of the phoney domestic property boom. And so there may well be more chickens out there yet to come home to roost.

On a wider front - Here’s one view of the measures being taken by international governments to keep the world from imploding. It’s generally positive but a negative note is struck by the author on the subject of troubled EU members . . .“The summit's main response to the challenge of government insolvencies will be to boost the resources of the IMF by $250 billion. But it is far from clear whether this will be sufficient to bail out the many vulnerable countries on the periphery of Europe. It is even more doubtful that the IMF will turn out to be the right institution for resolving financial imbalances and political tensions within the eurozone and the EU.” Which will be rather worrying for those commentators who feel that the EU really must get its act together soon to stop the eurozone breaking up. Or perhaps not, if the non-availability of the IMF as the 7th cavalry forces the creation of a debt union and/or the initiation of quantitative easing by the ECB. If this last sentence gives you the impression I have a reasonable handle on things, I should admit that I’m really just winging it. As some of you may have long appreciated.

But ignorance is no bar to bullshit. So on we go . . . The EU has announced changes in national accounting rules to be introduced in 2011 or 2012. Under these, a country’s GDP will include activities such as prostitution, contraband and drug trafficking. This will be fascinating to watch as any one of these could conceivably take Spain zooming past Italy, France and the pound-stricken UK. All of them surely will. So perhaps President Zapatero knew what he was talking about when he forecast two years ago that Spain’s GDP would be higher than Germany’s by 2012. Not as daft as he often looks and sounds.

Finally - Another random aspect of life in the UK that appeals to me:-
- The absence of dogs barking throughout the night and the concomitant lack of a need to retire to bed stuffed full of ear plugs.

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