FINANCIAL CRISIS

Benchmark bond yield hits new euro-era high

Merkel says Spanish bank bailout will come with strings attached

The financial markets on Tuesday continued to downplay Spain’s decision to seek a bailout for its banks in a bid to restore confidence in the banking system as the yield on the benchmark 10-year government bond hit a new euro-era maximum.

 The turbulence in the markets remained despite German Chancellor Angela Merkel despite praise for the reforms carried out by the government of Prime Minister Mariano Rajoy and his decision to seek European assistance to clean up the banks’ balance sheets, which she said was the “right” decision.

However, she underscored what her Finance Minister Wolfgang Schäuble and European Commission officials said Monday that the bailout would be accompanied by conditions. “There will, of course, be conditions for Spain (…) such as the restructuring of its banks to provide then with a viable future,” she said. “They will be different from those imposed in the case of an entire country having to submit its entire macroeconomic program to a rescue plan.”

The yield on the 10-year government bond closed at 6.71 percent after having at one point in Tuesday’s session moved above 6.8 percent for the first time since the euro came into being. That pushed the risk premium up 8 basis points to 528 basis points. The yields of other maturities also rose.

The stock market performed slightly better, with the blue chip Ibex 35 managing to advance a meager 0.09 percent at 6,522.50 points.

The 100 billion euros the state Orderly Bank Restructuring Fund (FROB) is expected to receive from the European Union will be at an interest rate of between three and four percent, but the EU commissioner for competition, Spaniard Joaquín Almunia, said in an interview Tuesday with the Spanish wire service Efe, that under EU rules, the FROB will have to charge the banks it passes funds to a rate of at least 8.5 percent.

 

Para poder comentar debes estar registrado en Eskup y haber iniciado sesión

Darse de alta ¿Por qué darse de alta?

Otras noticias

Avatar
Journalist at El País English Edition

Últimas noticias

Ver todo el día

La pretemporada de los Celtics pasa por Madrid

El Boston Herald afirma que el equipo de Massachusetts planea su próxima pretemporada en Europa

Las protestas por la exculpación de Ferguson se extienden por EEUU

Miles de personas marchan contra de la exculpación en Nueva York y otras ciudades

Desalojo en Hong Kong

La Policía desaloja la acampada en el área de Mong Kok, lo que eleva a 116 el número de detenidos desde el inicio de las operaciones a primera hora del martes

¿Puede seguir Juncker en la presidencia de la UE?

Hay que recordar que no ha sido el legislativo europeo sino un consorcio de periodistas de investigación quien ha levantado los casos de fraude y elusión fiscal

LATIN AMERICA

Crime threatening democracy in Latin America, survey finds

New research shows fear of violence is fueling support for authoritarian solutions and the desire to emigrate

“Mexico is outraged by atrocities like the Iguala case”

Luis Raúl González assumes the office of the president at Mexico’s National Human Rights Commission

Petrobras scandal rocks Brazil

Arrested suspects line up to reveal trail of bribes at Latin America’s largest state-owned company

Mexicans say “enough is enough” at huge protest rally

Tens of thousands from all walks of life call for changes to prevent a repeat of Iguala missing students case

Lo más visto en...

» Top 50

Webs de PRISA

cerrar ventana