Spain’s ailing Bankia SA is ready for a bailout after it asked for 19 billion euros. The Spanish government responded by moving to issue new bonds and dig deep into its bank restructuring fund. But with borrowing costs at an all-time high, the cost will be steep.
So far, the ECB has been distant and silent on the issue. So far it’s dumped trillions into the mission to save the eurozone, and some speculate the ECB may refuse Spain that same generosity. Still, an international solution might be forthcoming.
Although Spain may be forced to seek aid from beyond its own borders, Enrique Quemada, President of One to One Capital Partners, places the blame of Bankia’s current crisis squarely with Spain itself:
“In 2008 the governments of the United States and Great Britain fixed the financial system by injecting public money into banks. In Spain we have let five years go by before doing it and now finally money is going into financial institutions, banks are being nationalized, so the news is positive but clearly there’s the initial shock from the impact of something which should have been done years ago.”