In Spain it was known that a housing bubble would explode sooner or later. The houses were valued very high and with unrealistic prices for banks to give the credits.
In 2004 and in 2006 the Bank of Spain told to Caja Madrid:
“The property risk is growing by 55% (…) and it will continue increasing upt to very high rates”
Then the housing bubble finally exploded and Spain fell in a deep crisis.
Now in the last quarter of 2012, the crisis seems to have no solution and Brussels has imposed to Spain to create a “bad bank” which will be paid with public money.
Brussels validates the reforms of the Government of Spain and the International Monetary Fund (IMF) has recommended liquidating the non-viable banks as soon as possible.
The International Agency, the Commission and the ECB give the approval to the bad bank and want it to be operative the first of December.
The EC and the ECB ensure that the reforms which Spain agreed to comply if it request the rescue is “in line” with expectations. But FIM believes that more efforts have to be made Sareb (the bad bank that will manage the property portfolio of toxic banks) ready to open by the end of November.