Germany Takes a Pragmatic View of Spanish Banking

My friend Ward McCarthy sent me a Reuters note saying that Germany, through several political channels, has expressed the notion of a way for Europe to address a Spanish banking crisis without requiring an ignominious bailout of the Spanish government.  This is a refreshing sentiment.  We've said before that there seems to be nothing special about the nature of the Spanish banking crisis.  It seems to have some parallels with our own S&L crisis of years back.  The U.S. bank resolution process had to work overtime in high gear, but everything got done.

Providing multilateral aid/financing to support a bank resolution in Spain sounds like a potential way forward.  It does suggest backing off the position that no European funds would be provided for a direct recapitalization of Spanish banks.  And, it would seem reasonable that there should be some European participation in the resolution process, although this might be anathema to Iberian pride. 

Let's see how things develop from here, but this sounds like it could be good news.