Spain: Financial System Stability Assessment

IMF Staff Country Reports, June 6, 2024

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Spain: Financial System Stability Assessment

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Bibliographic details

• Published: June 6, 2024
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400277887.002

Overview and key findings

• The paper presents a report on Financial Sector Assessment Program (FSAP) in Spain.
• The bank-dominated Spanish financial system has shown resilience against shocks.
• Household and nonfinancial corporate sectors have continued to de-lever their balance sheets.
• Nonbank financial intermediation comprises a smaller share of the financial system.
• Systemic risk analyses cover the banking, household, nonfinancial corporates, and real-estate sectors.
• The main risks to financial stability are:
  • an abrupt, significant slowdown in growth;
  • a material, further tightening in financial conditions, including higher interest rates and risk premia;
  • downward pressure on real estate valuations.
• Banks’ ability to cope with asset quality pressures without resorting to deleveraging is inhibited by incumbent solvency buffers that are lower than European peers on a risk-weighted basis.

Policy recommendations and near-term priorities

• Deploy policies that ensure that significant banks retain a greater share of profits to further raise capital buffers and be better positioned against downside risks.
• Ensure macroprudential and supervisory authorities are well resourced to address emerging risks and challenges and close previously identified gaps in the policy framework.

Subjects and keywords

• Subjects: Anti-money laundering and combating the financing of terrorism (AML/CFT), Commercial banks, Credit, Crime, Financial institutions, Financial Sector Assessment Program, Financial sector policy and analysis, Financial sector stability, International organization, Monetary policy, Money
• Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), cash flow, Commercial banks, core inflation, coverage ratio, Credit, Financial Sector Assessment Program, Financial sector stability, financial system, Global, research support, Tier 1

Content in this bundle

• Spain: Financial System Stability Assessment; IMF Country Report No. 24/154; May 14, 2024
  • Spain: Financial System Stability Assessment; IMF Country Report No. 24/154; May 14, 2024 (Markdown version)
  • Spain: Financial System Stability Assessment; IMF Country Report No. 24/154; May 14, 2024 (PDF)