Chapter 39, Abnormal Commercial Loan

Every large loan negotiation involves more than just a few words. In addition to political interest exchange, it is accompanied by a series of risk assessments and detailed negotiations.

Commercial loans differ from purely policy-based loans.

Purely policy-based loans are fully backed by the government; banks simply disburse the funds without needing to consider risk or return. Commercial loans are different; even if a government provides a guarantee, it is limited to the principal amount.

The specific returns and risks must still be evaluated by the commercial bank itself. In theory, if the bank deems the risk greater than the returns, the loan falls through.

From this perspective, even if the Vienna Government agrees to issue the loan, whether the Spanish Government can ultimately receive the funds remains an unknown.

Of course, things are negotiable. Capital chases profits; as long as the return is high enough, risk is no longer an issue.