Bank of Spain’s Poor Supervision Fueled Crisis
Bank of Spain’s poor supervision fueled the crisis in this country.
The president of the European Commission (EC) Jose Manuel Durao Barroso, blamed the bank of Spain for making “very significant errors of supervision” that has added to the Spanish banking crisis. Barroso claims that the errors contributed to the real estate bubble in Spain and the ensuing property crash. He also rejected any claims that Brussels hold any responsibility for the crisis.
In 2012 Spain accepted a European bank bailout to support a sector that was struggling from overexposure to non-performing real estate loans. Regional savings banks, known as “cajas de ahorro” were particularly hard hit and were forced to merge beginning in 2009.
Durao Barroso said in a speech he gave at th opening of a seminar on “Europe After the Crisis”, We often asked about the situation of the banks because we had heard that they were in bad shape, but the answer was that they were all in perfect shape”, said the Portuguese politician, before adding that Brussels was also being told at the time that “the Bank of Spain was the best central bank in the world.”
“It is easy to say that the EU was to blame, but it was necessary to make adjustments, as Iceland did, which is not a part of the EU,or as Britain did ,” said Barroso, adding that “it is a lie that the problems were caused by the euro.”
Barroso said that the situation was still bad in Spain, and that improvements were taking a long time coming, although they would come this year. He also praised the fact that in Spain there were”no major political forces opposing the euro”.
