Are European Banks fine?: they just took over 600 billion dollars in loans from ECB

Banks and financial institutions in Europe keep on saying that they are strong and confident. Santander in Spain is even advertising that it is offering the highest dividends in the banking industry to its stockholders. They believe that we clients do not really understand what is going on. But, of course, there is no money to lend in the market and big and small firms are suffering the economic crisis pain as never before. Banks keep on hoarding money, wherever it comes from, just to fill the enormous hole that they know they have. Shame on them.
And many governments continue to mislead their citizens by not acknowledging their local banks´ deep troubles. And they insist, specially in Spain, that their banking industry is solvent and reliable as ever. Governments are treating their citizens as if we were all stupid. And they just do not get the message. A few weeks ago, for instance, many of these governments lost their elections in Europe -Spain, U.K., for instance- and will probably keep on loosing coming polls all around the world. Shame on them.

But reality is tough to hide. Just last week, the European Central Bank lent banks in its jusrisdiction the largest amount of money in its history -over 600 billion dollars-, at a very low interest rate of 1% on a 1-year term. Without this huge amount of liquidity, European banks would not be able to handle the deepening economic crisis. Yes, I know, Spain´s Zapatero is saying that the worst of the crisis -specially in regard to unemployment- is over. But he has been wrong for more than a couple of years now, as he is badly wrong this time. The worst of the Spanish crisis is around the corner -I mean after this summer´s hangover-, and will remain there for several years. The OECD and the World Bank just downgraded last week their forecast on Spain which, by the way, is going to be the worst performing economy in Europe. Let´s not forget, between 5-6 million people will be out of work in Spain next year -over 20% unemployment-. It is difficult to see how this social and economic crisis could be dealt with in a country with one of the highest fiscal deficits in the world already, close to 10% of its GDP. And it could get higher.

When are we going to be told as taxpayers and real owners of all this bailout money what is really going on?; several studies suggest that European banks are in deep trouble and technically insolvent. See my related articles on this issue on http://www.dossierempresarial.com/. Please follow the Opinion Link.