The drafting of the Report took into account several constraints, two of which I would like to mention. 3/14  On one hand, the obligation to maintain the confidentiality of individual banks’ data. The Report contains ample information on credit institutions, including intervention processes and the public aid granted, but it cannot go into details linked to the supervision of individual institutions whose confidentiality is legally protected, or assess those matters that are currently the subject of proceedings initiated in the courts. As to the period studied, although 2008 is the year the crisis started, the analysis is from 2000, on the understanding that it is impossible to explain the crisis without reviewing its sources and causes, which go back to the previous decade. Moreover, the year 2014 has been chosen as the date to close off the period considered, bearing in mind that it was the end of this year that saw the start-up of the Single Supervisory Mechanism, and that the measures envisaged in the Memorandum of Understanding entered into with the European Commission in July 2012 may be deemed to be concluded. In short, the seven years from 2008 to 2014 match quite closely the period which saw the emergence and development of the crisis, its treatment and the start of the recovery. The Report explains the measures applied, which should be considered in their macroeconomic and financial setting, one which progressively changed over the period in question.
The first half of 2012 saw a stepping up of so-called “redenomination” risk, which was a euphemism for the doubts over certain countries, Spain among them, remaining in the euro area and, indeed, over the survival of the single currency. In March, a second bail-out was approved for Greece and, in May, with the inconclusive Greek elections, rumours were again unleashed about the country exiting the Monetary Union. In parallel, there was a fresh bout of tension centred on Spain and on Italy, where two-year risk premia relative to the German Bund climbed to over 700 and 500 basis points, respectively. Fears intensified in Spain over the impact of the double-dip recession on the position of credit institutions and on the feedback loop between sovereign and banking risk. Funding conditions on the wholesale markets once again tightened and net fund outflows to the external sector stepped up, totalling € billion in cumulative 12-month terms, 29% of GDP. In mid-2012, Spain was facing what was practically a collapse in external funding, which it was able to offset with a substantial increase in Eurosystem funding, which came to account for € billion in August 2012, 34% of the liquidity injected by the Eurosystem into banks across the whole euro area.