Jittery foreigners take the money and run from Spain
As risk premium rises, non-residents move funds out while Spaniards boost their savings
The extent of the lack of confidence of foreign investors in Spain was evidenced by a massive outflow of funds invested in bonds, stocks and bank deposits in March, figures released Thursday by the Bank of Spain showed.
Net withdrawals in March came to 66.2 billion euros, almost double the amount in December of last year, which marked the previous record. The central bank began compiling financial investment flow figures in 1990.
Spain’s risk premium hit a euro-era high of 540 basis points on Wednesday after a massive selloff of government bonds.
At the same time, according to figures from the European Central Bank, bank deposits by companies and individuals in Spanish banks declined 31.441 billion euros in April from the previous month to 1.624 trillion. That was the second biggest monthly fall after January 2010. Over the course of the past 12 months, deposits have declined by 103.735 billion euros.
The fall in deposits was caused by non-residents withdrawing their funds. Deposits by Spanish residents actually increased by eight billion euros to 1.16 trillion.