Pablo Hernández de Cos: The impact of the COVID-19 crisis on financial stability

Closing address by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, to the seminar "The financial system in the COVID-19 crisis. Challenges and commitments", in a summer course organised by the Spanish Financial Press Association Universidad Internacional Menéndez Pelayo, Madrid, 1 September 2020.

Central bank speech  | 
21 September 2020
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Good afternoon ladies and gentlemen.

It is an honour and a pleasure to participate once again in this summer course organised by the Spanish Financial Press Association. 

It is clear that the scope of the pandemic and its impact on the world economy are very extensive. 

Following a 5.2% decrease in Q1, with respect to the previous quarter, Spanish GDP fell by 18.5% in Q2, when the restrictions linked to the state of alert were at their height. These declines represent the greatest contraction in economic activity in our recent history.

An improving path has been seen during Q2 and Q3. However, this recovery is incomplete, and uneven across sectors and agents. It is also subject to a high level of uncertainty owing to the doubts as to the course of the pandemic itself, as shown by the fresh outbreaks. It therefore seems clear that some of the pandemic's effects will be long-lasting.