Spanish Banks Hooked on ECB Cash for Years

Spanish banks have become reliant on the ECB, the European Central Bank, (the lender of last resort to EU countries) as investors sidestep their bonds. This will make Spain subservient to the stronger EU countries that loan their money to the ECB

The borrowing from the ECB by the Spanish Banks since the inception of the euro, based on Bank of Spain figures indicate that they asked for a record 130 billion euros ($166 billion) in July, accounting for 29 percent of total borrowing from the ECB, almost four times their average 8 percent share since 1999.

Spanish banks have been all but shunned by international investors since the collapse of a housing boom in 2007 triggered the worst recession in 60 years, with the unemployment rate surging above 20 percent. Bad loans reached 5.5 percent in May from 4.7 percent a year earlier.