Do Concussions Cause Dehydration

The financial tsunami impacts Spain

The terrible earthquake which we have raised today, and the consequences resulting tsunami is causing throughout the Pacific, moving away from economic news today some very important and that, surely, again alter the picture English financial. Yesterday, the Bank of Spain issued the list of entities compliant (and do not meet) the requirements of core capital established by the Government. In fact there have been many surprises, because in recent months we have been going to the reconfiguration of the system, especially in its aspect of the savings.
The relative newness comes from the imperative of the time for finding solutions. Since the publication of the list non-compliant entities have 15 working days to the issuing bank to explain its strategy and time where they think meet the requirements. And all this with the horizon in the resolution since Sept. 30, when they would have to be all of the general goal of 8% or 10% for entities that meet the following conditions: a) they have a wholesale funding ratio exceeds 20% and b) that are not distributed to third title to its capital by at ; least 20%.

entities with capital requirements mandated by differences in percentage points.
Source: Bank of Spain.

Basically, the target of 10% will go to savings, which are the only system that does not have securities representing the capital. The output is very difficult for these boxes, much as some of them are clustered around several SIP, as it will be forced to become banks to issue securities above 20% of the nominal capital and thus lower capital requirements to 8%. However, as the current conditions, ensuring the entry of investors in a English banks that have failed the exam and (obviemente) English to be involved in country risk that the market assigns to us, it will be a very complex task, for not impossible, unless they come with a significant negative premium. That is, with a purchase price of the securities at bargain prices. Ie very possibly some of the boxes will be fertile ground for the entry of large hedge funds, which will solve the problem in the short, but complicate the relationship "social" entities in the medium and long term.
The expected outcome of this operation is to strengthen the financial system entities to concentrate, increasing the average size of the boxes (instead of banks) and facilitate the delivery of credit to businesses. Tip, the forced conversion of many boxes in banks will mean reduced funding for social work, most of it for the welfare, thus generating a large hole in the national mattress relief situations of social exclusion and marginalization. That is, it is very likely that the welfare work of the boxes is reduced or eliminated.
Finally, it's pretty funny overall compliance with credit unions, which have become the most fragmented system. Therefore, the strategy that the Bank of Spain is following with them to achieve increased scale and reducing the number of entities is different, emphasizing the need for concentration to facilitate access to wholesale markets and to ensure the solvency of their long-term. It is also clear that the pace of concentration of non-being fast enough compared with that of the savings banks (60 rural banks by 16 savings banks), so do not be surprised much more aggressive attitude by the regulator in the coming months.