Sunday, May 12, 2013

Spain is officially insolvent: get your money out while you still can

Europe said that Greece was the first and last such restructuring, but then there was Cyprus.

Spain is holding off further recapitalisation of its banks in anticipation of the arrival of Europe's banking union, which it hopes will do the job instead.

But if the Cypriot precedent is anything to go by, a heavy price will be demanded by way of recompense.

Bank creditors will be widely bailed in.

Confiscation of deposits looks all too possible.

I don't advise getting your money out lightly.

Indeed, such advise is generally thought grossly irresponsible, for it risks inducing a self reinforcing panic.