The trouble with Spain's banks

Spain's government debt as a percent of its gross domestic product has been low by European standards. But it has been growing fast. The country’s banks have about $185 billion loaned to what the Spanish central bank calls ''doubtful debtors'' — much of it in bad loans to real estate and development companies. That equals about 13 percent of GDP, enough to push Spain's government debt much higher, although banks will probably absorb a large part of the losses. Read related article.

A rescue of Spain's banks could push the country's debt higher.
Sources: International Monetary Fund, Bank of Spain, European Union. The Washington Post. Published on May 10, 2012, 6:55 p.m.
 
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