Pablo Hernández de Cos: The Spanish banking sector - over one year of fallout from the pandemic

Opening remarks by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at the 16 IESE (Escuela de Negocios de la Universidad de Navarra/Business School), Banking Industry Meeting "Banking: helping to boost the economy", 6 July 2021.

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

Central bank speech  | 
14 July 2021

Good morning, 

I should like to thank the IESE Business School for the invitation to this event, which gives me the opportunity to discuss the main developments in the banking sector since the onset of the pandemic. The proper identification of risk developments in the sector is crucial, both to inform the authorities' and banks' response in this new economic recovery phase and to draw lessons with a view to tackling the medium and long-term challenges.

A good point of departure for this analysis might be to identify why it has been oft-repeated during this crisis that, thus far, the banking sector "has been part of the solution, not part of the problem".

Besides the fact that this crisis has been entirely exogenous in origin and bears no relation to the sector itself, there are two aspects that, in my view, have been crucial.

First, the international financial reform implemented over the past decade has given rise to a healthier, more capitalised banking sector that is more resilient to different shocks. In Spain, this reform also came in tandem with a programme of very profound restructuring in the sector.