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.
Spanish banks capital requirements
It looks as if 2016 will be the first year to bring some normality to Spain’s banking sector in terms of capital requirements since the start of the deep financial crisis. The most important consquence of this crisis has been the sharp drop in the industry’s profitability – a 6.8% decline in return on equity (ROE) to 5.3% in six years. But AFI analysts estimate that the Spanish banking sector’s profitability will be around 6-7% over the next few years.