The number of 500 Euro notes in circulation in Spain, known locally as ‘Bin Ladens’, has declined in line with the Spanish property market, suggesting a quirky gauge for measuring activity in the Spanish property market.

Locals call 500 Euro notes ‘Bin Ladens’ because, when the Euro was first introduced, everyone had heard of them, but nobody had actually seen one.

That didn’t last long. At the height of Spain’s property boom, you were far more likely to see a ‘Bin Laden’ in Spain than in any cave on the Afghan-Pakistan border. By last July one quarter of all 500 Euro notes were circulating in Spain, despite Spain issuing fewer of them than any other Eurozone member when the currency was first introduced. Nor does the size of Spain’s economy justify the presence of such a large proportion of the Eurozone’s highest denomination note.

So why so many ‘Bin Ladens’ in Spain? Because corruption in the property sector, along with a popular practise of paying for property with cash under the table, creates a lot of demand for high-denomination notes. ‘Bin Ladens’ make it easier to handle large quantities of cash, converting them into the currency of choice for bent town hall officials, money launderers, organised criminals, and fast buck property speculators, all of whom piled into Spain’s property boom.

But since last July, 4 million ‘Bin Ladens’ have dropped out of circulation in Spain, according to a recent article in the Spanish press. This has coincided with an alarming slump in the Spanish property market, and a government clampdown on town hall corruption. In the absence of reliable Spanish housing market statistics in Spain, you could do worse than look at the number of ‘Bin Ladens’ knocking about. Call it the Spanish property market ‘Bin Laden’ index.