31.05.2012
By Simon Miller
Money is leaving Spain at the fastest rate since records began according to data from the Spanish central bank.
As investors become increasingly concerned about the state of Spanish banks, following the property crash, Bank of Spain figures show that a net of €66.2bn (£52.9bn) was sent abroad in April compared with €5.4bn of funds entering the country, which was the highest rate since records began in 1990.
The capital flight figures predate the part0-nationlisation of Bankia and the figures could get worse as Spaniards send money to deposit accounts in the stronger economies of northern Europe.
Indeed, Bankia is reportedly offering a free Spider-Man towel to young depositors who deposit €300 by the end of the month. For every 50 euros saved, account holders can enter a draw for a trip to New York and the competition is an attempt to retain customers post-state takeover.
With Bankia needing €25bn in bailout money - more than twice what the government estimated - the European Commission is demanding how the Spanish government is going to recapitalise the troubled banks.
A European Commission spokesman, Amadeu Altafaj, told Spanish National Radio
"No one can expect that, with these negative results of some banks, the markets can react with euphoria," and added that a domestic solution to the country's bank crisis would be better than a European rescue.
Other stories you may find of interest:
A very British Complex
Greater complexity leads to greater risks for banks according to Professor Simon Collinson, Warwick Business School and the Simplicity Partnership
Fencing off the risk?
The Independent Commission on banking has set the cat among the pigeons with the recommendation to ring-fence retail operations. Simon Miller looks at how this came about and what unintended consequences could arise
Impacting on investment
With emerging markets looking for investment, Simon Miller looks at the rise of impact investment and what risks entails in this socially aware vehicle
