This from Goldman Sachs last week
Market developments since the Catalan vote on 1 October reflect a moderate rise in the risk premium on Spanish assets (albeit from a low level):
- equity prices have fallen and sovereign spreads over Germany have widened.
The Catalan government has issued debt in the past.
- The Spanish government has guaranteed the Catalan debt and holds around 80% of the outstanding amount.
- Moreover, the ECB provides liquidity to Catalan and Spanish banks on a fixed rate / full allotment basis (as it does to all banks in the Euro area).
Taken together, these measures contain risks to financial stability and serve to limit the economic implications of rising political tension.
- Provided access to finance remains largely unimpaired, the direct effects of uncertainty are likely to be quite limited and slow-acting, consistent with a steady moderation in the pace of growth that we continue to expect in Spain.
I've bolded just one bit of that from Goldman Sachs - the thing to watch IMO
--
Spanish politics continues on the simmer - from the weekend: Catalonia update - declaration coming?
Is it just me or does Catalonian leadership seem to be backtracking on the independence declaration issue? Which would indicate a lessening in tensions.
