The May 19 issue of The Economist had the following truly prophetic ad among its pages for the now failed, and bailed out, Bankia: “Some are happy the way they are, others, like us, prefer to discover what we can become.”
Ten days later the discovery process is complete: Bankia is now the biggest bank failure in Spanish history.
Our question: will The Economist invoice for advertising services rendered be paid out of bailout funds? Or, like Aurelio Izquierdo’s €14 million termination payment, will this money come from “non-bailout money”?
Courtesy of Spanish daily Europa Press:
BANKIA NEEDS EU19 BLN IN STATE SUPPORT, EUROPA PRESS SAYS
What does this mean? Again, from yesterday: “Sadly, what the Spanish government and the Bank of Spain have demonstrated, is that despite all the rhetoric, capital flight has not only stopped, it is accelerating.”
In other words, since the bailout total yesterday, which was €15 billion, through today, another €4 billion in cash has left the bank.
Yes: you won’t hear the words “Bank Run” uttered in the media, as that would imply panic. Unfortunately, that is the only explanation for a €4 billion capital (i.e. cash) deficiency overnight.
Things in Spain are getting worse by the minute, which sadly is becoming more predictable by the day.