End of housing bubble brings retrenchment

One of the striking things about the past year is that there has been no banking crisis in Spain.The Bank of Spain, which supervises the financial system, took a dim view of the high-yield, high-risk instruments that have wreaked so much havoc in the US and Europe. So it banned offbalance sheet special purpose vehicles (SPVS).Banks were free to set up SPVs, so long as capital was properly allocated and the risk remained within the bank. This considerably reduced the appeal of these exotic instruments.