For our Spanish-speaking viewers, here is the webcast during which the final results of the Oliver Wyman et al consultancy report identifying insolvent Spanish bank capital needs will be presented. This conference is not to be confused with the July 2011 stress test which saw all Spanish banks passing with flying colors. We know very well that the cap at this conference is €100 billion even if the final need will be far higher. The only question is how much of its credibility will Oliver Wyman sacrifice to create a short term bounce in Spanish bonds by undercutting the real number, even as the real bailout needs creep ever higher.
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Some highlights:
- SPAIN STRESS TEST ADVERSE SCENARIO SEES 6.5% GDP DECLINE
- SPAIN STRESS TEST ADVERSE SCENARIO SEES 26.4% HOUSE PRICE FALL
- ADVERSE SCENARIO SEES 55%-60% PEAK TO TROUGH HOUSE PRICE FALL
And the actual numbers:
- SPAIN BANKS NEED EU16-25 BLN OF CAPITAL IN CENTRAL SCENARIO
- OLIVER WYMAN ADVERSE SCENARIO SHOWS CAPITAL NEED OF EU51-62 BLN
- ROLAND BERGER ADVERSE SCENARIO EU51.8 BLN CAPITAL NEEDS
- RESTOY SAYS PROBLEMS LIMITED TO BANKS THAT ALREADY BEEN SEIZED
Got it: Undercutting reality once again because nobody ever learns that by demanding more, more, more bailouts in a week or a month only destroys the impact and kills what little credibility there is.
When is the Second Spanish bank bailout.
And the punchline:
- RESTOY SAYS CORE OF BANKING SYSTEM IS RESILIENT.
Well, under these conditions there is no reason why anyone should lessen the subordination requirements of the ESM. Assuming it is even implemented.