So after the rumor of bailout, the official denial and later the external pressure, Spain has finally requested for a bail out from Europe. The bailout is expected to be utilized, in turn, to bail out Spanish banks. The money will come from either the EFSF or the ESM, whichever is politically expedient.
Even before the request, the Spanish government has already bailed out its fourth largest banks just recently.
I find the bailout in Spain as curious because it raises one question: whatever happened to the LTRO?
Aren’t the LTRO with money worth EUR1 trillion meant to bail out banks implicitly?
Did the LTRO fail to do what it was meant to do, which was to give European banks very cheap refinancing options over 3 years? Did Spanish banks not gain access to the LTRO? What did the Spanish banks do with the LTRO?