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Spanish and Greek Banks Face Massive Loss

Updated on May 18, 2012

We, here in America, have always been insulated from global issues. partly because America is protected by two oceans. But, in today's world, this has been minimized greatly by the Internet and satellite communication.

What happens to European banks does have a large impact on American banks because of their investments with each other. Just as the housing market collapse in the US due to bad loans, Europe had its own housing issues and bad loans.

The European debt crisis will greatly impact us across the pond. What happens in Greece and Spain can cause the wave effect on US banks. Greeks fear their savings will lose most of their value if the country leaves the euro and converts back to the old currency, the drachma. This seems a likely scenario now and just this week Greek banks faced a massive loss from its customers. over 700 million euros were withdrawn and since January 2012, that number is 72 billion euros. The Central European bank has refused to loan more money to Greek banks, and the Central Greek Bank, helped lesser banks avoid collapse by loaning them their last reserves. The EU and specifically, Germany, is simply refusing to give the Greeks one more dime. Politically, the Greek government mirrors the financial crisis.

Because of the huge debt Spain is facing and because of Greeks making a run on their banks to pull their savings out before it is worthless, Spaniards are following the Greek example. On May 17, 2012, Spain's Bankia, one of its largest, lost 1 billion euros in customer withdrawals. Spain even partially nationalized this private entity to prevent total collapse. Had this happened, the wave effect would have hit other nations with debt issues, like Portugal, France. Bankia's value on the stock market lost 30%.

Right now, it seems many European countries and banks are teetering on the fence. It would be a good guess that the EU debt crisis is destined to get worse until countries begin to default. Greece is the first. The only country saving the EU seems to be Germany, even though they have their own problems.

As the EU situation worsens, American banks will lose and become impacted. A war with Iran and the repercussions in oil prices zooming up could be all it takes for the EU crisis to become catastrophic. Just keep your eye on what is happening across the Atlantic pond.

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    • nextstopjupiter profile image

      nextstopjupiter 

      6 years ago from here, there and everywhere

      I would like to add this article to your hub http://www.alternet.org/story/155454/cooperative_b...

    • nextstopjupiter profile image

      nextstopjupiter 

      6 years ago from here, there and everywhere

      The people worldwide should follow the Greeks and the Spaniards and withdraw all their money from the banks, without the savings of the people the criminal financial system which caused the financial crisis would collapse and clear the way for a new beginning without these criminals.

    • perrya profile imageAUTHOR

      perrya 

      6 years ago

      and what does diet have to do with the economic situation of Greece and Spain?

    • profile image

      Big jake 

      6 years ago

      Yeah, I eat only raw meat; for a lot of reasons but one basic reason – because cooked meat makes me vomit. I fast a bunch, and, after a fast you lose the ability to digest cooked meat temporarily (raw is fine), and you have to get very sick a few times after eating cooked meat for your body to re-adjust. After going through that cycle one too many times, I just stayed with the raw.

      I’ve had no problems with the raw stuff, the only things that you have to work around are the texture (jiggly, has to be managed) and the modern meat industry (supermarket meat is dirty). For the taste, after your body gets a taste for the raw stuff, it actually makes the meat taste good. Raw steak tastes better, raw fish makes you feel good immediately, and even grosser stuff like liver can even taste sweet (shocked me too).

      I’ve been at it for a few years now, and haven’t had any troubles. In fact, because an all-raw diet’s an expensive pain in the butt to stay on, I usually have to mix in things like bread, potatoes, and pizza regularly, and those are the things that make me feel gross and give me bad side-effects.

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