Sunday, June 03, 2012

Choices

They could bail out the banks simply by paying off mortgages. Instead people get chucked out, and the banksters get massive amounts of free public money.

Seven years ago a local savings bank persuaded Reyes, a cleaner, to take out a 100% mortgage to buy the flat for €195,000 (£157,000). The bank has since merged with half a dozen others, all of which had thrown bad money at property speculators, to form a sick giant called Bankia.

Last week, as Reyes waited for the bailiffs, Bankia was demanding €23.5bn of taxpayers' money to stave off collapse. That is €1,350 from each working Spaniard. Among other costs that need absorbing by the savings banks that made up Bankia are a €6.2m payoff to one senior executive who helped drive the bank to disaster and €14m to another.

That this is so rarely pointed out is telling.