The Spanish stock market – the IBEX 35 – is sliding toward news lows of the day and leading European markets lower, down 1.75 percent.
The sell-off is pretty broad-based but is being led by Banco Popular and a few other bank stocks, like Bankia (via Bloomberg.com):
Yesterday, there were reports that the ECB was investigating its own lending standards for bailout loans extended to Spanish banks after a German newspaper made the charge that collateral standards were too lax.
The newspaper said that the ECB applied haircuts to Spanish government debt – furnished by the banks as collateral for the loans – that were too small.
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