In the ‘bad bank’ model, a bank protects itself by dumping its toxic assets onto a second, newly-created institution. By taking the problems off its books, the first bank hopes to restore its reputation and financial health so that it will be able to carry on business as usual.
The Spanish monarchy has just carried out an analogous operation. The 82-year-old former king, Juan Carlos I, who reigned for 38 years until his abdication in 2014, has gone into exile because, as he explains in his farewell letter, of the ‘public repercussions of certain episodes in my private life’.
The ‘episodes’ have included ongoing investigations into a gift of £77m he is alleged to have received from the previous king of Saudi Arabia. The hope is that by leaving Spain now Juan Carlos will protect the Spanish monarchy, allowing the present king, Felipe VI, to distance himself from his father’s rapidly declining reputation.
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