For Spain, The Beginning Of The End Arrives As Bank Of Spain Starts Using ELA

Tyler Durden's picture

As we described in detail yesterday, things are going from worse to worserer as the problems in Spain - more specifically in its banking sector - are deepening as deposit flight accelerates. As the WSJ notes PIMCOs' comment: "A bank 'jog' is happening in Spain - the private sector is leaving the banking system." But the Bank of Spain isn't leaving anything to chance. The WSJ disconcertingly highlights that last month the central bank appears for the first time to have activated an emergency lending program that will enable its banks to borrow from the Bank of Spain directly, bypassing the ECB's relatively tough collateral demands.

The so-called Emergency Liquidity Assistance program is shrouded in secrecy, and the Bank of Spain won't confirm that it has been used. The Bank of Spain appears to have doled out about EUR400mm under the program, based on publicly available data. That would make Spain at least the fourth euro-zone country - following Greece, Ireland and Portugal - to use the ELA, which generally is reserved for situations when banks have exhausted all other financing options.

As we pointed out yesterday, this would appear to confirm a "full-blown bailout" is imminent, as the collateral problems mount.


and The Bank of Spain was quick to respond to this reality (with a denial):

Bank of Spain comments in e-mailed statement on WSJ report that central bank provided ELA to lenders:


Sept. 5 (Bloomberg) -- Bank of Spain says “liquidity provision to banks other than ordinary monetary policy operations represents an insignificant fraction of total lending by the Bank of Spain to financial system.”


Measures adopted to lift restrictions on interest rates on deposits is not aimed at helping banks attract deposits, central bank says

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GetZeeGold's picture



Can't we just fix Spain? I'm sick of hearing about Spain every freakin day!!!


Jason T's picture

but not as sick as hearing about isreal wanting to bomb iran everyday .. can't go a day without headlines about that ...  

GetZeeGold's picture



Do you see anyone bombing Iran?


New idea.....let's just focus on one problem at a time.


Dr. Richard Head's picture

It's hard to work on one problem at a time while the problems are coming at us like a raunchy Japenese bukake porn.  Speaking of Japan.....

Peter Pan's picture

Prrsonally, i have given up reading these materials on Spain, Greece etc with any sort of enthusiasm. The writing is on the wall as much today as it was last week, last month and last year. It makes no difference when the train is going to come roaring through as long as you are not on the tracks.

EscapeKey's picture

If you mean 'fix' as in 'neuter', then yes, we could. But it might lead to a 2nd rise of Hitler. Or Franco. Or someone equally disturbed.

Sudden Debt's picture

Hitler and Franco, evil as they where, where brilliant and charismatic people.

I just don't see politicians like that between the current ranks.

Greedy, self profiting, clueless and without any real conviction discribes them best.

ElvisDog's picture

I agree. If there is a Hitler out there, we haven't seen or heard from him yet. The current crop of Euro leaders are the most incompetent, pampered, flabby bunch of self-serving bureaucrats I can imagine. One thing that made Hitler so effective was that he came from the streets and had a natural feel for the behavior of crowds. Draghu, Merkel, Hollande, and the rest don't mingle with the unwashed masses. They meet at places like Davos in facny hotels behind multiple lines of security teams.

DosZap's picture

. If there is a Hitler out there, we haven't seen or heard from him yet.


Evidently you haven't been watching the one we have closing the doors on us.

ElvisDog's picture

Don't be so cryptic, who are you referring to?

intric8's picture

Yeah, if Hitler just listened to his generals - europe would be a drastically different place

falak pema's picture

only the bulls of Pamplona are juiced up in Spain; the rain has not fallen on the plains since ages.

The bankstas are suffering from extreme drought and their only issue  is singing "run, run, may the devil take the hindmost!'

jekyll island's picture

Spain is the new Greece.  Only 15 more to go.  

GetZeeGold's picture



Only 15 more to go


The departures have once more been appears no one counted on rain.


midtowng's picture

Spain capital flight now worse than Indonesia's in 1997.

LawsofPhysics's picture

Banks are insolvent, again.  What will the kleptocrats do?  print more money for their buddies and send the taxpayer the bill?

place your bets.

EscapeKey's picture

remember, money printing does NOT cause inflation (and other fairytales for kids by... forbes)

nice how all assumptions work in one direction.

LawsofPhysics's picture

John Harvey is an idiot.  Two words for that guy "margin call".   Printing paper and stacking up paper promises on your fucking desk might not be inflationary initially, but in order to do that printing you had to make implicit promises that that paper will still be able to deliver the same value in the future - FAIL.   

Ar-Pharazôn's picture

print print print


spanish inquisition's picture

things are going from worse to worserer

And its deteriorating FAST. Totally skipped over worser....

phalfa5's picture

hurry ...   it could get more worser  , or even worser than that, most worsest !

fonzannoon's picture

Great news! (from bloomberg)

James Ensley of Rocky Face, Georgia, took a $10,000-a-year job last month as a school-bus driver after almost two years of unemployment benefits ran out. While that’s a third of his prior pay as a warehouse manager, the father of two says he’s content.

“It feels great to go to work instead of having somebody tell you ‘I can’t help you,’” said Ensley, 51, whose former employer went bankrupt in the wake of the U.S. housing slump. “I miss my old job, but it is not coming back so I have to get over it.”

full stupid link:

EscapeKey's picture

Who the hell can live on $10k/yr?

Oh I forgot, they'll just fix some CPI weightings, and suddenly you'll live the life of Riley.

LawsofPhysics's picture

and the rest of the taxpayers will pick up the tab for the his healthcare coverage, that of his family, his kids schooling (he won't pay any income tax as 10K is below the poverty line fo a single persons, let alone a family of four), plus he will also recieve a SNAP card to feed his family (family of four at 10k per year, damn straight he will have a SNAP card) - "Winning"

Totally fucking stupid, wages fucking matter!!!!

falak pema's picture

ELA = back door butt bashing of government ledger by the privista oligarchs who run with their funny money pumped into the banks, by the EFSF/ECB combinat.

giggler123's picture

So is now a good time to sell my spanish property?  lol

GetZeeGold's picture



Good as time as any I suppose.


Sudden Debt's picture


2 euros... and 60 cents...


Schmuck Raker's picture

I need some "Emergency Liquidity Assistance" too... I need some butter for this popcorn.

Zero Govt's picture

"...things are going from worse to worserer..."

Believers of the democratic (cough) system have 2,500 years of results to suck on, this sugar coated turd has no other flavours.

Spit or swallow Statists? 

GolfHatesMe's picture

Donde Esta el Ducko Tapeo?

eeaton's picture

Why won't EWP go down? I'm short waiting for Spain to crumble.

juicyfruit's picture

when are the Spanish riot cams coming online?

intric8's picture

Where has fiscal prudence gone in this world? They'll find ways to bypass everything. Rule of law is meaningless.

kridkrid's picture

There is no reason to talk of fiscal prudence or the rule of law when the system that we have selected to facilitate our economic growth is behaving exactly as it was designed to behave. You can't get angry at the dog for eating out of the trash, it is the nature of the dog. Fiat money and fractional reserve banking... Where virtually all "money" is loaned into existence with interest attached. What the world faces now has been baked in all along.

ClassicCommodity's picture

Spanish women are becoming an ever increasingly cheap commodity. What do they call that index? The one for whores

Zero Govt's picture

Better we focus on the index of the political and banking classes who brought us to this point

Yet another page in the history books on the social and economic wreckage caused by this scum 

ClassicCommodity's picture

I agree to an extent. This index shows a fairly sad (yet true) correlation with economic activity however. 

machineh's picture

What do they call that index? The one for whores

In the U.S. it's called the presidential poll.

shovelhead's picture

No more time for games.

Break out the Incredible Hulk towels, Mario. Call it a new 'green initiative'.

The Webslinger just ain't got enough sticky to keep the money in Spain.

stiler's picture

and another one bites and another one bites and another one bites the dust

why not call it a Mediterranean Spring?

jbc77's picture

All this good news and the futures continue to push higher......will the markets ever become "unbroken" and snap back to reality. I'd really llike to capture 200-400 handles of downside on the S&P.....

Not to mention the news from FedEx last night......


AynRandFan's picture

The ELA is the only thing that matters, and it is not discussed publicly.  There is no limit to liquidity, and no deadlines on debt.  It won't be inflation, it will be hyperinflation.

Schmuck Raker's picture

Meanwhile in Brussels:

US embassy evacuated in Brussels and police check suspect vehicle according to US officials and police - updates to follow

Print 12:23 - Global News - Source: Newswires

Picture of the suspect vehicle here:

ptoemmes's picture

Worse to worserer?? Did I miss worser?

About as confusing as keeping track of Dumb and Dumber, Dumb and Dumberer, and Dumb and Dumberer To which is rumoured to be on again then off again, but seems to be playing in the EU now as I write this.

Which brings us to Bob Saget

youngman's picture

I wonder about all the money leaving Spain....and other countries for that matter....will it EVER come back...To me its 5 years of pain as things settle out with new will take a generation..a very fast generation...

foodstampbarry's picture

Everything's fine.... Keep buying stock, keep shopping, keep watching the kardashians.