Fistful of CDOs?

Spanish banks borrowed up to EUR 44 billion in December from the European Central Bank, “replacing banks’ use of wholesale capital markets, which have been strangled by the global credit crunch,” writes today’s FT. Furthermore, “The Spanish banking system is second only to the UK in Europe in its use of mortgage-backed bond makrets and other securitisations to fund lending.”

The European effects of the bursting of the US housing bubble have mostly been echoes, but maybe this is a sign that Europe has some bubbles of its own to worry about.

This entry was posted in A Fistful Of Euros, Economics and demography, Europe and the world by Doug Merrill. Bookmark the permalink.

About Doug Merrill

Freelance journalist based in Tbilisi, following stints in Atlanta, Budapest, Munich, Warsaw and Washington. Worked for a German think tank, discovered it was incompatible with repaying US student loans. Spent two years in financial markets. Bicycled from Vilnius to Tallinn. Climbed highest mountains in two Alpine countries (the easy ones, though). American center-left, with strong yellow dog tendencies. Arrived in the Caucasus two weeks before its latest war.

2 thoughts on “Fistful of CDOs?

  1. As far as I know, on average house prices have been growing in Europe as fast as in the United States in the last 8 years. And this despite the fact that in Germany, one of the biggest markets, the prices have been falling.

    This means that prices in England and Spain must be completly unrealistic and most likely will collaps soon.

  2. I suspect that the collapse of the Northern Rock bank in UK is a sign of things to come. I know it hasn’t ‘officially’ collapsed, but when a bank goes running to the government looking for money it’s fair to say that it’s had its day.

    As for the UK housing market, I know so many people who would love to buy their first home, but they can’t unless they take out stupidly large mortgages. When the first time buyers finally give up the dream due to the high prices then the crash will be inevitable. I only hope it won’t last too long.

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