In the 2007-2010 financial crisis, the economies of different countries have been affected with various degrees of intensity according to their exposure to some of its main drivers. In Spain securitization activity grew spectacularly mostly in sync with large increases in bank credit to the private sector. The spectacular upward swing in the Spanish credit cycle was buttressed by relatively loose lending practices and large increases in housing prices (see Jimenez et al., 2010, and Reinhart and Rogoff, 2009). Hence the recent episode of financial instability in Spanish shares many common features with prior instances of.
