SPAIN MAY TURN TO NAMA-TYPE BAD BANK TO SORT OUT ITS BANKS - Spain last week, in its regional and municipal elections, saw the ruling socialist party well defeated and success for the more right-wing Partido Popular, ahead of general elections in ten months' time. The massive shift in support is partly to do with how the main political parties avoided engaging with the electorate and offered no solutions to Spain's problems. For almost two weeks now Madrid's main square, Sol, has been the centre of a demonstration, with thousands occupying the square to show their unhappiness with government, the main political parties, and high unemployment - which among the young is up to 45%. There have been similar scenes in many other Spanish towns.
Joe Haslam, a professor at the IE business school in Madrid, says that the protesters plan to stay in Sol square until Sunday and then wind down the protests. He says they have achieved their aim of getting the problem of high unemployment on to the news agenda. He says the Spanish protests are very different from the rest demonstrations in North Africa, as the Spanish are not seeking a regime change. He says it is more like Iceland,where they want the corrupt to be tried than the Arab protests, where that wanted the Government to resign.
On the Spanish banks, Professor Haslam says the Bank of Spain has the situation fairly well under control, but he says that some problems could continue to be hidden at the country's regional banks - Cajas - so as to not affect Spanish borrowing costs on the bonds markets. He says that Spain could yet turn to its own NAMA-type bad bank as a solution.
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MORNING BRIEFS - AIB is selling about $1 billion worth of US commercial mortgages to US bank Wells Fargo and private equity group Blackstone. Some of the mortgages are on high profile sites such as the Grand del Mar resort in San Diego, and the Met Life building on New York's Park Avenue. AIB took a discount of about 7-15% on the loans.
*** Online payment firm Realex has entered the French market in a deal with BNP Paribas, which will let French retailers sell online and process payments in real time. Among the company's best known Irish clients are motortax.ie and Aer Lingus. Its first steps in France, through its partnership with the bank, will see it target major online retailers for business.
*** This weekend sees the G8 meeting in Deauville in France, where the leaders of US, Russia, the UK, France, Germany, Italy, Japan and Canada are set to discuss the world economy, Japan's nuclear crisis, uprisings in the Arab world, climate change and regulation of the internet.
*** The Burberry fashion company today reported a 40% rise in profits for its last financial year. Profits hit £296m sterling. The company said there had been a boom in spending on luxury goods. Its sales grew by 27% to £1.5 billion, helped by strong demand from Chinese shoppers and tourists. Figures out yesterday suggest that wealthy Chinese tourists spent more than £200m in some of London's most expensive shops during 2010. Shops like Harrods and Selfridges have installed Chinese credit card machines and are hiring staff who speak Mandarin.
*** On the currency markets the euro is trading at $1.4174 cents and 86.88 pence sterling.
