Bonus letters and accommodation restrictions affect Spain

The new episode of the economics show "Economics on the Street" opens the door to the world of government bonds. Luis Ignacio Fernández Irigoyen explains what a financial corralito is and the consequences of this banking product.

Maybe someone you know once told you, "Don't buy government bonds because if a financial corralito happens in Spain, you will lose your money." This expression has its nuances, as Luis Ignacio Fernández Irigoyen explains in the program "Economics on the Street".

First, it is necessary to know when a financial corralito occurs: when the government blocks money in the bank. You can only withdraw money once a week in the amount the government sets, not how much you want. The bank is blocking money because of a national emergency, and basically the corralito affects everyone without exception.

It would be difficult for a financial corralito to emerge in Spain because Spain is a country with a very strengthened social and legal structure. Private property is still respected in Spain and in Europe. And, on the other hand, because Spain is the fourth largest economy in Europe and they cannot afford to lose it.