Bank of Spain maintains countercyclical buffer for Spanish banks at 0%

Bank of SpainBanl of Spain building

The Bank of Spain will maintain of the counter-cyclical buffer at 0%, arguing that (a) the credit-GDP gap continues in negative territory, and (b) the Spanish economy still shows a remarkable strength as the GDP increased by 0.7% t/t in 1Q19.

Analysts at Bankinter commented: “We consider positive for the profitability of the financial entities that the Bank of Spain has not increased the capital requirements of the Spanish banks. Although thanks to the excess of capital that the entities have over the regulatory requirements, they would not have had a problem absorbing the 25bp / 50bp that was thought to be imposed, in the end an increase in requirements usually implies a subsequent increase in the target ratios of the entities.This would have implied an additional reduction to the profitability of the own resources of the entities that is under pressure to a large extent by the level of interest rates.”


About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.