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Ivie
VALENCIAN INSTITUTE OF ECONOMIC RESEARCH
A study published by FUNCAS and the Ivie analyzes the impact of the crisis on the Spanish banking sector and details the challenges financial institutions still have to face
The report recommends speeding up the restructuring process of Spain's bank sector, improving assets and reducing costs to recover its normal functioning

The resources allocated for cleaning-up the assets are equivalent to 10% of GDP. This data, among others, shows the cost of the crisis for the Spanish banking sector, which in turn has experienced a profound transformation in the past two years, especially, with the savings banks' restructuring process. The study El sector bancario español en el context internacional: El impacto de la crisis, developed by the Ivie for FUNCAS and directed by Ivie researcher and Professor of the Universitat de València Joaquin Maudos, takes an in-depth look at the impact of the crisis on the Spanish banking sector. He compares the recent developments in Spanish credit institutions with other European countries and examines aspects such as profitability, efficiency, solvency, debt, specialization, the non-performing loans ratio and the expansion of the activity pace.

The journey through recent history presented in the study emphasizes the years of greatest growth for the banking business, from 2000 until the beginning of the international crisis in the summer of 2007, as well as the impact of the crisis to the present day. The report also devotes special attention to the measures taken to deal with the crisis both at international and national levels (reform of the Savings Banks Law, approval of Spain's Bank Restructuring Fund (FROB), changes in the Bank of Spain regulations, new information requirements, demand of higher levels of capital, etc.), and observes their effectiveness.

In addition to detailing the cause of the problems that financial institutions face, the study raises important issues which must be resolved to restore the normal functioning of the sector, such as:

  • Speeding up the current restructuring process
  • Further reducing the installed capacity
  • Resolving the difficulties of obtaining long-term financing in wholesale markets
  • Increasing the transparency of information
  • Further cleaning-up the assets
  • Improving the governance of financial institutions
  • Improving the supervision of financial institutions
  • Savings banks should take advantage of their close client relationship and their social role in contributing with their benefits to community work, a value which makes them different from other financial institutions.
Further information

Presentation (in Spanish)
Press release (in Spanish). This document is only available in Spanish. For more information about its content, please contact none