Mark Gilbert , Columnist

Catatonic About Catalonian Independence

There's good reason to look past what the bookies are saying.

September 29, 2017 at 10:19 AM UTC

Mark Gilbert is a Bloomberg Opinion columnist covering asset management. A former London bureau chief for Bloomberg News, he is author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”

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Catalonia plans to hold a referendum this weekend on seceding from Spain. Bookmakers reckon the vote will pass; but while yield spreads on the region's bonds have risen, they remain well below the levels of even a year ago. What gives?

Investors currently demand about 2.75 percentage points more in yield to lend to Catalonia for three years than the Spanish government. While that's up from 2.15 points in May, it's well below the 3.25 point premium they were asking for a year ago.