New government, old problem

I think that if Spanish banks would save dividend payments for a year the issue would be almost solved. So the Government has not to nationalise banks as Germany or UK did.

Whatever the reasons, this is a good decision, which - with a little luck - could have the following consequences:

- Banks will have the sell the real-estate properties at current market value. It's not hard to predict that real-estate properties will keep going down, maybe at least 30%, until the young generation could pay for them. Right now, they can't with or without credit.
- This might reactivate the house construction business, specially if second-hand properties become more expensive than new houses (amazingly, this is already happening).
- A little reactivation of the housing business might be all the economy needs to start growing again.
- We all get lucky and this happens within 2 years.

I'm still wandering why Mr. ZP insisted on keeping the real-estate prices up, instead of closed to what the young generation could pay. Yes, a government does not set prices... but it could make decisions like the ones Mr. Rajoy had taken (the one mentioned in this article plus raising the property taxes). Such measures could have killed the housing bubble as early as 2006 (as many of us have suggested at the time). I'll conclude that Mr. ZP was ill-advised (I'm trying to be kind here) instead of trying to "screw" the younger generations. Amazingly a "socialist" party did that... No doubt many PSOE voters (like myself) stayed home last Nov 20th.

In Spain - as in other EU countries and in the US - the state supervision on banks has proved lacking and failing. Nowhere has this failure been sanctionned in any way . It has been considered has inevitable and unfixable. In the EU, part of the supervision has been rightly transfered to the more adequate european level. However the new european supervisor has proved as feeble and impotent as the national ones (see the latests banks "stress tests") . The piling up of more and more stringent regulations on banks will be of no effect if their supervision remains so feeble . Financial supervision should be considered as important as competition control and should be given
comparable means and powers . JG GIRAUD

The world's entire banking system has fallen victim to Friedmanomics.

This is what happens when everything is driven by market forces. Echos of the infamous "greed is good" speech by Gordon Gecko.

Banks were driven by greed to sell money they didn't have because the radical free market let them do so.

The anarchic economic policies of Friedman have to be ditched asap so that the global economy and banking system starting working again. Friedman economics cause chaos. The last 4 years have shown it. How he ever won a Nobel prize beats me.

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In my opinion, the restructuring of construction industries is prerequisite for the normalization of Spanish banks and the unemployment. During the past boom of construction industries, those industries had expanded more rapidly, resulting in social problems. New administration tries to ensure financial markets that the Spanish government could resolve the problem without great social conflicts.