Europe: Banking in trouble again - BBH

The European Court of Justice ruled that Spanish banks that over charged for mortgages must offer compensation notes analysts at BBH. 

Key Quotes

“This was a blow to Spanish banks, which fell in response to the final ruling.  The preliminary ruling allowed a time-limit to claims for reimbursement, but the final court ruling disallowed the constraint.  All Spanish banks are not equally affected and some banks have put aside some of funds.  Still, financials is the worst performing sector in Spain today.  They are off nearly 1.75% in late morning turnover, while the Spanish market as a whole is off about 0.75%.”

“Meanwhile, Italian banks are under modest pressure.  The index of Italian banks is off 0.6% and is the sixth declining session of the past nine.  After the cabinet approved increasing the country's debt by 20 bln euro to help the banks, both chambers of parliament will vote on measures today.  For reasons that seem to stem more from politics than economics, Italy has been slow to address its banking system woes, and when it does move, it tends to do too little.  There is no shock and awe or even a pretense of getting ahead of the curve of expectations.”