Exhibit 2: Bank debt grew much faster in Spain than elsewhere
Source: Bank for International SettlementsExhibit 3: Financial institution debt as % of GDP
Source: Bank for International Settlements, IMFWhat is this 109% of GDP, the debt of Spanish financial institutions, actually worth? According to Spain’s own data, delinquent loans amount to nearly a fifth of GDP, or 184 billion euros (US$228 billion). That would wipe out all the remaining shareholder value attached to the Spanish banking system.It seems obvious from the data, however, that Spanish banks’ bad loans are far in excess of the reported 184 billion euros. Alone in the world, Spanish banks drastically increased their lending after the 2008 crisis — by nearly two and a half times — while overall bank lending in the United States and the eurozone barely changed due to weak economic conditions. It is widely reported that Spanish banks are piling new loans of bad old loans in order to avoid reporting losses that now probably exceed two-fifths of GDP.