So the Spanish need 50B Euro …

EU exposure to Spanish banking sector by country in %

Overnight FT published an interview with Spanish Economic Minister, Luis de Guindos, where he revealed Spanish banks need another 50B Euros to set aside against bad loans.

To put this into perspective, that’s about 4% of total Spanish GDP, and would bring their 2012 budget deficit to 12%, compared to previous projections of a 2012 budget deficit approaching 8% of GDP.

What is the knock on effect? I’ve got a model tracking EU banking sector exposure, country, by county. Actually, I can and do break it down to individual banks and each bank’s specific exposure to other bank’s and nations, but I’m not going to publish that detailed data here as I sell it to my banking clients. But in aggregate the chart above presents national exposure to Spanish banks, with Ireland, Germany, The UK, Sweden and Austria rounding out the top five.

Not exactly good news. Even worse: Spanish unemployment just hit a record high, with almost 22% out of work.

But just to prove the old axiom it takes two to make a market, Citibank have reccomended an overweight position in European banks.

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