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Lehman Brothers - Companies & Markets

Bankers fear housing slump will hurt Spain

By Victor Mallet in Madrid

Published: October 2 2008 20:27 | Last updated: October 2 2008 20:27

Spain’s banks may have been spared a direct hit from the hurricane sweeping through the world’s financial systems, but bankers in Madrid predict that the country will still succumb to a conventional banking crisis over the next two years because of the collapse of its housing market.

In the past two weeks of turmoil, Spanish banks have appeared remarkably robust compared to their rivals in the US, the UK and continental Europe.

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