Spain’s banks caught with hand in cookie jar

Only a few years ago, Spain’s banks were seen in some policymaking circles as a model for the rest of the world. This may be hard to fathom now, considering Spain is seeking €100bn to bail out its ailing lenders.

But back in 2008 and early 2009, regulators in Spain were riding high after their country’s banks seemed to have dodged the financial crisis with minimal losses.

A big reason for their success, the regulators said, was an accounting technique called dynamic provisioning.