The principal reason why Spanish banks are so short of money to lend is the size of Spain's external current account deficit. Running at around 10% per annum, the deficit means that Spain needs to find roughly 7,000 - 8,000 million euros (7 to 8 billion) a month to settle the account. Unless external lenders step in and provide funding (by buying cedulas, or Spanish government debt, for example), the Spanish banking system keeps gasping for air, it suffers from a chronic lack oxygen in the bloodstream (and each month things simply get worse) in the form of new money to lend to oil the transactions flow. This is what having a "financial crisis" means when you come down to the nitty gritty of things.

Sounds familiar.

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