Is normal nowadays to see Banks hungry for new capital injections to make their core capital stronger given their risk weighted assed are "increasing".
Is also normal to see those banks in the primary markets selling preferred shares with coupons from 12%-17% given the lack of appetite of the invertor community for risk of this type and given the decrease of prices of assets of kind.
Aparently in Spain, Banks are not offering their pref shares to institutional investors but just to retail investors like you and me. Some of us might be up to date to what is going on in the markets but for sure there are many other people that they dont have a clue of what is going on. The Banks sell their pref shares to the retail customers at coupons of 5%-6%, which is already a rip-off, and when these retail investors sell those pref shares in public secondary markets they need to give up around 70% of the value of the pref shares.
The question here is where is the SEC? where is the regulator to protect retail customers? are going to see more "Madoff's" in Europe?
