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: Calculated Risk

The Pain would come from Spain

By Anonymous

First, a great overview from Raphael Minder at the NY Times: A Spanish Bailout Would Test Europe?s Strained Finances

[A]ny bailout of Spain ? with an economy twice the size of [Greece, Ireland and Portugal] combined ? could severely stress the ability of Europe?s stronger countries to help the financially weaker ones, and spell deep trouble for the euro, Europe?s common currency.
...
The looming question is whether Spanish banks are really as healthy as the government and the banks say they are. ... Last July, Spanish banks emerged relatively unscathed from stress tests carried out across Europe ... But the credibility of the stress tests has since been undermined by the collapse of Irish banks.

There is much more in the article.

And from the WSJ: EU Hopes to Double Bailout Fund. Concerns about Spain is the reason for doubling the fund.

Full post as published by Calculated Risk on November 25, 2010 (boomark / email).