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Why the pain in Spain has mainly been contained

By Gillian Tett

Published: February 1 2008 02:00 | Last updated: February 1 2008 13:42

Twice a year I travel down to Spain to visit my relatives - and almost always return feeling worried about financial risk. For nobody can fly over the Spanish coastline these days without noticing that the country has recently been in the grip of a construction boom.

And that, unsurprisingly, has led to an explosion in the balance sheets of banks, with a corresponding boom in the Spanish residential mortgage bond securitisation (RMBS) market.

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