Washington, (EFE).- The governor of the Bank of Spain. Pablo Hernández de Cos, today asked the Spanish banking sector to strengthen its provisions in light of the uncertainty that may arise from the bankruptcy of two entities in the United States and the rescue of a third last March.
“The benefits in 2022 have been very significant, and we ask banks not only to maintain provisions, but to increase them to be in a better position to face possible downward revisions to growth,” he said during an event at the Brookings Institution. , in Washington.
Hernández de Cos insisted that the situation of the sector in Spain is similar to that in Europe, and that the risk of contagion from US banking uncertainty is very limited thanks to the robustness and liquidity of Spanish banks.
The governor defended that this assessment is compatible with the perspective that the macro scenario is increasingly complicated, also for banks, for which reason he called for taking advantage of the short-term benefits generated by the increase in interest rates in Europe to strengthen the sector.
On March 16, the European Central Bank (ECB) decided to raise its interest rates by half a point, to 3.5%, because inflation in the euro area is still very high, and announced that the next decisions will depend on economic and financial data.
Headline inflation in the euro zone slowed to 8.5% in February, but core inflation rose to 5.6% and, according to the agency’s forecasts published that same day, the former will moderate this year to 5, 3% and the second will be 4.6% on average.
During his talk, Hernández de Cos reviewed the ECB’s forecasts and warned of the enormous uncertainty surrounding inflation due to the increase in the underlying rate compared to the slowdown in the general rate.
The panic caused by the banking crisis in the United States had an impact in Europe and almost finished with the Swiss bank Credit Suisse, which finally had to be acquired by its competitor UBS after the crisis of confidence that was sinking its price in the market.