Great Story About Black Money in Spain

Has a country ever been so benevolent with lawbreakers as Spain is right now? The government has come up with a plan to allow people to deposit their Bin Ladens (500 Euro notes usually gained during the property boom years and hidden under the bed or in safes at home so called because everybody knew they existed but nobody had actually ever seen one) to be taken into banks and deposited no questions asked and without any responsibility on behalf of the person who puts them in. The reason is simple, to restore liquidity in the banking sector and rescue the economy. It is being presented as the huge advantage that Spain has over the rest of Europe in this respect.

So there it is, you give an amnesty to money laundering and illegality in real estate transactions to save your contry's backside in hard economic times. A totally novel and exciting way of making sure that the wheels keep turning and Spain can regain its preeminence in shady financial practices from Nigerian scammers.

Banco Santander. A Major Spanish Success

Banco de Santander has developed from a small regional bank to become one of the major players in European banking and the biggest bank in Spain over the last few years. It has now decided that it wants to dominate the European scene, starting with the UK, as it does the Spanish banking scene. In Spain where Santander goes the other banks soon follow and it seems that they have started to open the tap to new mortgages, a tap that has been closed now for almost a year. Expect other Spanish banks to follow.


Banco De Santander HQ in Sao Paulo

So what made the Santander strong in the current market? Spanish banks never bought into toxic debt to the same extent as other European banks as they were too busy being parochial in Spain by funding developers here, hence the huge construction boom of recent times, and also they looked to Argentina and other Spanish speaking South American countries as well as Portuguese speaking Brazil to develop their brands in new markets. So busy were they that when all of the newly repackaged toxic debt from the States was offered they didn't even bother looking at it. So now they are cash rich and picking up good deals like Abbey, Alliance and Leicester and Bradford and Bingley in a sort of Buffett way, buying in at the best time.

So why is the Spanish housing market dropping so much, just like the UK market? The major reason that transactions in Spain are down 26% this year is the lack of availability of credit. The 33% drop in mortgages given out is one of the proofs of that. People still want to buy but cannot because of the restrictions on lending and therefore the market in dropping in price bringing in even more people who want to buy. Obviously there is an oversupply of two bed two bathroom flats in coastal areas but the latent demand for the larger conurbations (Madrid, Barcelona, Valencia, Seville, Bilbao) is still there as the population grows year on year and rural depopulation increases as people look for opportunities in the cities. If the Santander open the taps again expect the Spanish market in the major towns and cities to perk up, especially if, and that is a big if currently, it coincides with a drop in interest rates from the European Central Bank.

So what will be the next target for Santander in the UK and when will the Competition Commission start looking into their adquisitions?