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Economy in Brief
U.S. Employment Cost Index Shows Steady Gain
The employment cost index for civilian workers increased 0.6% (2.3% y/y) during Q2'16 ...
Chicago Purchasing Managers Index Eases
Chicago purchasing managers reported that their Business Barometer slipped to 55.8 this month ...
Euro Area Unemployment Rates Steady. Down-trend Remains in Place
Levels of unemployment are falling for EU and for EMU but the annualized pace of the drop has been slowing...
U.S. Initial Claims for Unemployment Insurance Rise
Initial unemployment insurance claims increased to 266,000...
Kansas City Federal Reserve Factory Sector Index Declines; Expectations Improve
The Kansas City Fed reported that regional manufacturing sector business activity deteriorated sharply during July...
Euro Area Sentiment Wanes as EMU Firms
The EU region saw its sentiment gauge drop to 104.8 in July from 105.7 in June...
by Louise Curley June 4, 2012
Spain is in trouble once again. Capital is leaving the country and interest rates are rising, as can be seen in the attached chart. The 10 year bond rate was 6.5% on June 1st and probably higher today. The European Central Bank, the European Commission and the International Monetary Fund together with the Spanish government are engaged in trying to find ways to ameliorate the situation while the foreign banks that have lent to Spanish banks in the past are worried about their exposure to these banks.
Some Information on foreign banks' exposure to Spanish banks, as well as to Greece, Ireland and Portugal, can be found in Haver. In The Bank of International Settlements (BIS) data base, there is a table "Foreign Exposure to Greece, Ireland, Portugal and Spain" under the section, Consolidated International Claims on BIS Reporting Banks. Data are quarterly and begin in 2010. Most data end in the fourth quarter of 2011. Countries covered are Germany, France, Italy, Other Euro Area, Japan. U. S. U. K. and Rest of the World. U. S. banks appear to have the largest exposure, $227.7 billion dollars, to Spanish banks followed by Germany and other European Countries. Japanese and Rest of the World banks have much smaller exposures to troubles in the Spanish Banks.
|Exposure of Banks to Claims from Greece, Ireland, Portugal and Spain, Q4 2011 (Billions USD)|
|U. K. Banks||137.5||33.3||192.1||22.3|
|Other Euro Area*||179.6||21.9||67.2||33.5|
|Rest of World Banks*||41.3||5.7||57.3||9.5|
|* Data are as of Third Quarter, 2010|