Tricks and mortar

摘要

Spanish banks have been doing their best to shield themselves from the bursting of the country's property bubble. By buying properties before the loans on them go bad, lenders can mask their worst bets. Restructuring loans has the same effect. Help is now at hand from an unlikely source: the normally sober Bank of Spain. In July the central bank circulated guidance that relaxed provisioning rules on risky mortgages.rnThe change makes some sense. Until now, banks have had to make provision for the full value of high-risk loans-those above 80% of the property's value-after two years of arrears. That was far too demanding, since property values rarely fall to zero. Under the new rules, they only have to allow for the difference between the value of the loan and 70% of the property's market value.