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Markets welcome Spanish banks rescue deal | Markets welcome Spanish banks rescue deal |
(40 minutes later) | |
Markets in Europe and Asia have risen in response to the bailout of Spain's banks that was agreed over the weekend. | Markets in Europe and Asia have risen in response to the bailout of Spain's banks that was agreed over the weekend. |
On Saturday, eurozone ministers agreed to lend Spain's banks up to 100bn euros ($125bn; £80bn). | On Saturday, eurozone ministers agreed to lend Spain's banks up to 100bn euros ($125bn; £80bn). |
In early trading, the FTSE 100 in London rose 1.6%, the Dax in Frankfurt was up 2.2% and Cac 40 in Paris was up 2.0%. Spain's benchmark index, the Ibex in Madrid, rose 4.4%. | |
The euro gained more than one cent against the US dollar. | The euro gained more than one cent against the US dollar. |
Spain's weakest banks were left with billions of euros of bad loans following the collapse of a property boom and the subsequent recession. | Spain's weakest banks were left with billions of euros of bad loans following the collapse of a property boom and the subsequent recession. |
Earlier, the Nikkei in Tokyo closed up 2.0%. | Earlier, the Nikkei in Tokyo closed up 2.0%. |
On the bond markets, the yield on Spanish 10-year bonds dropped below 6%. Bond yields are taken as an indication of the interest rates that governments would need to pay to borrow money. | On the bond markets, the yield on Spanish 10-year bonds dropped below 6%. Bond yields are taken as an indication of the interest rates that governments would need to pay to borrow money. |
The exact amount of emergency funding that Spain will receive will be decided after two audits of its banks are completed within the next few days. | The exact amount of emergency funding that Spain will receive will be decided after two audits of its banks are completed within the next few days. |
Spain is in its second recession in three years and the economy is expected to shrink by 1.7% this year. | Spain is in its second recession in three years and the economy is expected to shrink by 1.7% this year. |
"The Spanish announcement is not a solution to the eurozone's ongoing woes, but it is a statement of intent," said Richard Hunter from Hargreaves Lansdown stockbrokers. | "The Spanish announcement is not a solution to the eurozone's ongoing woes, but it is a statement of intent," said Richard Hunter from Hargreaves Lansdown stockbrokers. |
"Some much-needed time has now been bought in Spain, which will allow the market an at least temporary sigh of relief." | "Some much-needed time has now been bought in Spain, which will allow the market an at least temporary sigh of relief." |
Spanish journalist Miguel-Anxo Murado told BBC News that many Spanish people were surprised there had been a bailout at all. | |
"The government has been very successful at denying the need for this bailout," he said. | |
"Now the controversy is actually whether we should be happy or humiliated about this." | |
There were demonstrations against the bailout in Spain on Sunday. |