Spanish Banks Hit Panic Button As Independence Odds Soar But 'Stall' Rumor Sparks Buying-Panic

Catalonia’s bid to separate from Spain had prompted investors to dump bonds issued by the region’s two biggest lenders, CaixaBank SA and Banco de Sabadell SA. Today, in a signal that the banks are taking thelikelihood of Catalonia independence very seriously, Sabadell has called a board meeting to approve a change of headquarters outside of the region.

The last few days' drop in Catalonia's biggest bank bonds has prompted an even more serious reaction by the banks themselves.

Sabadell notified the Spanish stock regulator CNMV that it will hold a board meeting today at 5pm local time on the possible change of location of its corporate HQ.

Bloomberg reports that the move was prompted by “uncertainty” from the challenge presented by independence movement, citing unidentified people in the market.


Sabadell officials offered no denial, saying HQ change would be to guarantee the legal safety that’s currently provided by the European Central Bank.

And as is clear, this is having a positive impact on the bonds (albeit modest).


Furthermore, Spanish Economy Minister Luis de Guindos told Bloomberg this morning that Catalan banks have indicated that if this process goes on, they are totally open to relocate their headquarters to other places in Spain.

Speaking on Thursday in a Bloomberg Television interview, de Guindos slammed the Catalan administration for its illegal actions and said independence is out of the question. Spain has nothing to discuss with the secessionists until rule of law is restored, he said. The instability may persuade Catalan banks to shift out of the region, he added.

“They have indicated that if this process goes on, they are totally open to relocating their headquarters to other places in Spain,” de Guindos said.


“This is a clear indication of how insane is the regional government of Catalonia.”

The bottom line indication from these moves is simple - the banks (and the government) are increasingly convinced that Catalan independence is going to happen.

And judging by Spain's decoupling from Germany...

And Catalonia's decoupling from Spain...

The market is not waiting for the final decision, even as Bloomberg reports that, according to two people familiar with their plans, Catalan separatists are trying to find a way to put off a definitive declaration of independence to create space for a negotiated settlement with Spain.

The movement’s leaders are divided over their next step, with hardliners from the party CUP demanding the regional government make good on its plans for a unilateral declaration of independence following Sunday’s illegal referendum, according to the people, who asked not to be named because the conversations are private.


Regional President Carles Puigdemont’s mainstream separatist group is concerned that such a move would have immediate negative consequences for the economy, the people said.

We find this a little doubtful and very interesting timing ahead of Monday's planned separation, that could well be designed to sow some more chaos as the establishment continues to paint the Catalonia-independence-voters as extremists...

Markets are ready to bounce on any headline...

Spanish Economy Minister Luis de Guindos said in a Bloomberg Television:

“The group within the Catalan government that is calling the shots is the CUP, an extremely radical group with a lot of anarchist links and they are the ones setting the agenda... Everybody has started to realize.”


“This is not a question of arbitration or mediation, it is a question of a government that has to enforce the law."


“There is nothing to negotiate without the full respect of the rule of law.”

Additionally, Bloomberg admits that a spokesman for the Catalan government didn’t respond to three calls and other messages seeking comment.