Spanish Lending Rates Soar To Highest Since 2008
Despite sovereign bond yields plumbing new record lows and the Prime Minister proclaiming (against Draghi's advice) that the nation has turned the corner and is out of the crisis; Spain's record unemployment and record loan delinquency is showing up in a major credit-creation-crushing way for small businesses. As Bloomberg's Jonathan Tyce reports, Spanish new business lending rates just experienced the largest 2-month surge in over a decade to their highest since 2008. At 4.04%, new business loans trade over 300bps above two-year sovereign debt (and are diverging) as the efforts of Europe's 'whatever it takes' central bank are being entirely wasted in terms of reaching the Keynesian growth-driving economy. We suspect this surge will once again raise talk of a rate-cut (and expose the impotence of the ECB's transmission mechanisms).
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