CHART: Eurozone Bailouts Are Horrible At Lowering Local Government Bond Yields

Anyone who thought the Spanish bank bailout announcement would be followed by a rally in risk asset prices and a collapse in local government borrowing rates may have been a little too optimisitic.

Indeed, borrowing costs in Spain surged today leaving many wondering if the bailout was doomed to fail.

Indeed, 3 of the last 4 eurozone bailout announcements were followed by an extended period of higher interest rates relative to the German rate.  From Thomson Reuters chart god Scott Barber:

euro bailout

Photo: Scott Barber / Thomson Reuters Datastream

Here’s a look at how the Euro banking sector stocks performed during those same periods:

banks bailouts

Photo: Scott Barber / Thomson Reuters Datastream

MORE: Here’s A 90-Second Guide To The Spanish Bailout >

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