When many wonder if the latest bailout will actually work, there's a problem. When the bailout of one country leads everyone to start looking at the next state bailout, there's a really big problem. Guess where we are now?
A bailout of up to €100bn for Spain's ailing banks failed to calm nerves about the future of the euro on Monday amid confusion over the plan's details and worries that Greek voters might choose to abandon the single currency.The banks continue to drag down the global economy and not so surprisingly, they continue to get away with financial weapons of mass destruction.
The hurried bailout announcement after an emergency video conference of eurozone finance ministers at the weekend was meant to ease pressure on Spain and other troubled European economies ahead of Sunday's elections in Greece.
But Spain's borrowing costs rose on Monday, nudging closer to levels that are considered unsustainable and dragging Italy towards the danger zone. Europe's stock markets fell slightly, despite an early bounce, the FTSE 100 in London finishing down 0.05%.
Spanish banks went on global expansion missions in recent years including in the US. Santander and BBVA are based in Spain so US regulators need to confirm what the impact will be with this crisis. Maybe they're fine, but there's a strong possibility that this crisis could impact US banks.
