Reply To: Spain’s banking sector death blow?


read an interesting blog the other day about spanish banks in which the author mentioned the possible difficulties “for the Spanish treasury to guarantee bank deposits as happened in Germany (after 1995) and Japan (after 1992) or has happened recently in the UK in the case of Northern Rock, since under the terms of the cedulas if a bank fails the cedula holders have to be paid out in full before any depositor receives a penny”

A cedula by the way is a debt instrument secured against a pool of mortgages to which the investor has a preferred claim in the event of an issuer default.