Pablo Hernández de Cos: Building resilience in uncertain times - safeguarding financial stability, encouraging investments

Remarks by Mr Pablo Hernández de Cos, Governor of the Bank of Spain, at the 2022 Conference of Mediterranean Central Banks "Building resilience in uncertain times: safeguarding financial stability, encouraging investments", jointly organised by the Central Bank of the Republic of Turkey, the Organisation for Economic Co-operation and Development (OECD), the European Institute of the Mediterranean (IEMed) and the Bank of Spain, Istanbul, 31 October 2022.

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

Good morning ladies and gentlemen.

It is a great pleasure for me to welcome you all to this Conference on Building resilience in uncertain times: safeguarding financial stability, encouraging investments. We could not have asked for a more delightful setting for this Conference than this beautiful city of Istanbul.

Let me start by thanking our colleagues from the Central Bank of the Republic of Türkiye, the OECD and the European Institute of the Mediterranean (IEMed) and, in particular, Governor Kavcıoğlu, Ambassador Florensa and Achraf Bouali for jointly organising this Conference. I would like to especially emphasise the decisive commitment of IEMed, thanks to which we are now opening the seventh edition of this Conference, which is becoming a reference among the fora for dialogue and cooperation in economic and financial relationships in the Euro-Mediterranean region.

The last edition of this conference was held in June 2021 in a fully virtual format, as we were in the middle of the pandemic. On that occasion, an incipient recovery was taking place and there was optimism about the outlook, given the good progress made with vaccination.

However, almost a year and a half later, even if we have returned to a face-to-face event, we are once again in a highly uncertain environment.

Indeed, the economic outlook has significantly darkened in recent months. We are now confronting higher and more persistent inflation, tighter financial conditions and a global growth slowdown. The war in Ukraine looms over the current outlook and is exacerbating the impact of all these economic challenges. As a consequence, recession risks are spreading, and there is considerable volatility in financial and commodities markets.

At the current juncture, decisive economic policies are more important than ever.