Spain bank crisis may mean trouble for expats

Published:  2 May at 4 PM
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Tagged: Spain, UK, Euro, England
As reported by The Telegraph, this week, eleven Spanish banks had their credit ratings downgraded as the nation’s economy keeps going downhill. So what does it mean for expatriates who have savings accounts with them?

On Monday, official data revealed that Spain’s economy had dipped into recession as ratings group Standard & Poor’s downgraded several big banks. Among those hit was Spain’s largest bank Santander.

This downgrade also affects the bank’s Spanish firm called Banco Santander, which will be a grave concern for UK expats holding accounts in Spain. However, Santander’s UK arm, which has over 25 million customers, will remain unaffected.

Many of the other banks which were downgraded include BBVA (Banco Bilbao Vizcaya Argentaria) and Spain’s unit of Barclays. Spain’s third-largest bank, Bankia, was put on the “creditwatch” list.

Spain is seen as an extremely vulnerable economy in the eurozone and is now under massive pressure to slash its government debts through severe austerity measures. The country suffers from an unemployment level of about 25%.

Savers with cash in UK banks will be covered, if the bank goes bust, for the initial £85,000 per investor, and £170,000 per joint account. This is promised under the Financial Services Compensation Scheme.
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