From the WSJ, and article about the Spain bailout:

“Brimming with cheap three-year loans provided by the European Central Bank, Spanish lenders this year have been among the few buyers of Spanish sovereign bonds. Their heavy buying had helped keep a leash on bond yields, slowing their steady rise.

But Spanish banks largely have exhausted their stockpiles of ECB funds, analysts say. Now the question is whether, after getting recapitalized by the government, they will keep buying sovereign bonds.”

So banks get money from ECB, then they buy sovereign debt, then the Spanish government gets money and decides who to give it to? Well luckily I’m sure officials base their decisions on who to give funds to SOLELY based on need and NEVER consider helping the banks that buy the most sovereign debt. I’m glad we can construct all of these immensely valuable conflicts of interest and trust in human integrity that it will all work out in an honest and fair fashion. I think economists understand why that is…