PANIC over the stability of Spanish banks hit fever pitch yesterday, exposing yet another rupture in the financial system holding the eurozone together.
Banco Popular, one of the Spain’s leading financial firms, caused mayhem after admitting that it needed billions to bolster its balance sheet.
Shocked investors dumped shares in the firm, with the bank stock’s value plunging by 24 per cent this morning, after the cash call and plans to issue another 2 billion shares.
It resulted in €1.4billion being wiped off the value of the bank’s share price.
And the worry spread to other Spanish banks with shares in Caixabank and Banco de Sabadell diving by 3.4 per cent and 4.5 per cent respectively.
It comes after the country announced record debt levels, owing its creditors €1.095 trillion.
Spain now owes more money than its entire economy generates in a year.
In March, the European Central Bank dropped slashed core interest rates further into negative territory.
Today’s cash call by Banco Popular is now a visible sign of the strain financial institutions in Europe are under.
It comes after Italy last month launched an emergency rescue fund for its banks amid fears they could topple.
Meanwhile in France, the country has ground to a halt as thousands of workers go on strike over labour reforms. French President Francois Hollande is attempting to allow firms to negotiate on a longer working week implementing a maximum of 46 hours.
Around the same time, some of Germany’s biggest banks saw huge falls in share price relating to fears of low interest rates and profits at the firms.
Full article: Eurozone RUPTURE: Now SPAIN threatens to tear EU apart as banks LOSE €1.4BILLION in a day (Express)