In a conference by Miguel Fernández Ordóñez, Governor of the Bank of Spain from 2006 to 2012, at the Ramón Areces Foundation in Madrid, he tried to find out whether, within the technology-generated changes, there is one that is “disruptive”, that can produce a radical change in the banking activity of such importance that, as is happening with other industries, it forces private banks to transform themselves into companies very different from those that exist today.
Bank of Spain
Spanish households reduced their savings efforts marginally in the third quarter of 2017. Despite the Spanish banks’ attempts to offer positive returns on deposits against a backdrop of negative interest rates from the ECB, families are looking for greater returns from other kinds of financial assets like investment funds.
The stability in Spain’s growth in the fourth quarter compared with the third is the result of two forces pulling in opposite directions: the strength of the export markets has offset the adverse effect of increased political uncertainty in Catalonia.
Spanish banks NPLs ratio fell to 8.22% in October, over one percentage point lower than a year earlier. Recently published figures from the Bank of Spain show that the pace of the decline in NPLs accelerated in October, registering an anual 12.52% drop (-11.64% in September).
All the sectors in the Spanish economy should contribute to improving competitiveness and efficiency, at the same time as cutting their debt. The Spanish banks are doing just that.
The current political scenario in Spain requires us to highlight some points about our country, using as a starting point the Bank of Spain’s interesting analysis called: “The impact of the uncertainty arising from the political tensions in Catalonia”.
Financial institutions, companies and households have continued to adjust the debt accumulated in the first half of the year. In the case of non-financial companies and households, their level of debt is increasingly closer to the European average, against a backdrop of greater economic growth and preference for home ownership.
Housing prices have grown 16% since end-2014, according to the Bank of Spain. This is after a decline of 37% in nominal terms (45% in real terms) since their peak at end-2007.
Foreign investors have increased their leadership in terms of how many shares they own in Spanish listed companies. They held 43.1% of the total at end-2016.
The European bail-out of our banking system saved its skin. Now, a decade later, parliament and the Bank of Spain are investigating what happened.