A good friend in the UK is made redundant a few years ago and instead of cycling through driving July rain to yet another tower job decides to invest her pay-off in a house in a major Spanish city. Problems:
- She needs a bridging loan while she frees up other assets to pay the full purchase price.
- Being unemployed, with no immediate intention of seeking other work, and with investments in things unlikely to appeal to the imagination of most risk analysts, banks aren’t interested in talking to her.
- Domestic banks are officially discouraged from offering mortgages (with relatively favourable rates) of more than around 50% to non-residents.
So she calls a friend in a provincial town in la Mancha, who comes up with a solution. He gives English lessons to the director of a minor local branch of CCM, who sees a boom coming and wants to be there. Mr Director says, No problem, I’ll authorise the mortgage and my colleague J in your city will do the nuts and bolts.
- The estate agent calls and says, You say you’ve got the mortgage organised, but J hasn’t said anything to us, and when we call he’s never available.
- J has had a nervous breakdown.
- This is because his view of work at a regional savings bank consists of sitting behind a desk with a picture of his children on it, taking people’s deposits, and giving them a frying pan and a smile every now and again. His customers are elderly Manchegans lived in rented accommodation, not incomprehensible foreigners wanting large loans.
So Mr Director takes over, and everything goes swimmingly. By the time the loan is paid off two years later, Mr Director is ensconced in an impressive new sub-Wall Street glass & steel block in the town centre, the town has spilled out across the desert and is a city, geologists have made fortunes finding water to create the illusion of sustainability, hordes of 20-somethings with miniscule salaries have acquired property at improbably high prices, and CCM has more than a dozen branches in the far away city, one of them employing J in a minor role.
The sense of responsibility in the PSOE-owned political-industrial complex in Castilla la Mancha is so resilient that it is a full day before the regional broadcaster can bring itself to mention the Bank of Spain takeover.
A new local joke: Who says Catalans are smart? They’ve spent years arguing with central government about an extra billion, while we cunning Manchegans managed to extract 9 billion overnight.
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