Pablo Hernández de Cos: Financial stability situation in Spain

Speech by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the X Financial Sector Meeting, organized by Expansión and KPMG, Madrid, 14 October 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Good morning ladies and gentlemen.

Let me first thank the organisers for inviting me to participate in this tenth edition of the Financial Sector Meeting. On this occasion my address will focus on the Banco de España's assessment of the main factors of risk to financial stability at present, the potential impact on deposit institutions and the tools available to the Banco de España and the other authorities to mitigate such risk.

Assessment of the balance of risks to financial stability

The balance of risks to the Spanish financial system's stability has worsened somewhat in the past six months. This has been due in particular to the downward revision of the global economic outlook.

Indeed, global GDP growth continued to ease, to a year-on-year rate of 2.8% in 2019 Q2, more than 0.5 pp lower than a year earlier. This slowdown is particularly affecting some emerging economies and Europe