Publications

Analytical Articles

The Analytical Articles present various subjects relating to the economy and finances of Spain, the euro area and the international environment. They seek to bring the papers and analyses of the Banco de España to the attention of a broad public audience interested in current economic and financial affairs.

Since January 2017, the Analytical Articles have been disseminated ahead of the publication of the related quarterly Economic Bulletin and are listed by release date or by subject.

All documents are available in PDF format PDF File. Opens in a new window

  • 09/05/2019
    The latest protectionist trade trends and their impact on the European Union (682 KB) Francesca Viani

    In an attempt to rebalance trade with China, the United States administration decided in early 2018 to introduce a series of protectionist measures affecting certain imports in particular. This gave rise to an escalation of US-China trade tensions. The new tariffs have affected a significant percentage of Chinese exports to the United States, but their impact on EU trade has only been marginal to date. The indirect effects on European economies through the global value chains have also been limited. However, possible tariff barriers on the automotive sector could raise the affected trade flows substantially.
    Simulations made with econometric models confirm that the tariff measures adopted to date would have relatively moderate direct effects on global economic activity and on EU countries. That said, the simulations also warn that a decrease in business confidence and an unfavourable reaction by international financial markets could amplify such adverse effects. Additionally, possible future auto sector tariffs could have a significant impact on European economies in an industry already facing important challenges associated with the structural and technological transformation process currently under way.

  • 09/05/2019
    World economic outlook for 2019 (734 KB) Pedro del Río and Esther Gordo

    Recent weaknesses in the world economy have prompted a downward revision of forecasts for 2019. The baseline projection scenario points to a widespread easing of growth, albeit more so in some areas than in others, against a backdrop of high uncertainty and significant downside risks. These include, most notably, the possible proliferation of protectionist measures, a disorderly no-deal Brexit, a sharper than expected slowdown in China or in the euro area, or a severe financial market adjustment. Any – or a combination – of these events could have a significant impact on the world economy, in a setting in which there is little room for manoeuvre in macroeconomic stabilisation policies.

  • 11/04/2019
    Recent housing market developments in Spain (1 MB) Pana Alves and Alberto Urtasun

    After the sharp correction during the crisis, activity in the Spanish real estate sector commenced its recovery in early 2014. This improving trend has since been observable both in quantity and price-based indicators. However, this market is well known for its high heterogeneity due to the location of the properties, their type and the nationality of purchasers. The recent buoyancy seems to reflect, among other factors, positive labour market developments and the low cost of borrowing against a backdrop of gradual growth of loans for house purchase.

  • 09/04/2019
    The April 2019 Bank Lending Survey in Spain (618 KB) Álvaro Menéndez Pujadas

    The results of the Bank Lending Survey show somewhat less expansionary behaviour of loan supply and demand in 2019 Q1, both in Spain and in the euro area. Thus credit standards for approving loans tightened in both areas in the two segments of lending to households and did not change in loans to enterprises. The terms and conditions for new loans held steady both in Spain and in the euro area, except those for consumer credit and other lending, which eased in Spain and tightened in the euro area. For the second quarter of 2019, the banks of both areas did not anticipate further tightening of credit standards save those for loans to households for house purchase in the euro area. Loan demand in Spain decreased both in that from enterprises and in that from households for consumer credit and other lending, while that from households for house purchase increased. By contrast, in the euro area, the demand for loans to households increased, although that for consumer credit and other lending slowed, and the demand for loans to enterprises stopped growing. According to banks in both areas, the conditions of access to financial markets remained unchanged or even improved, both in retail markets and in nearly all wholesale markets. The ECB expanded asset purchase programme continued having a positive effect on the liquidity and financing conditions of banks in the past six months, although it had a negative impact on their profitability. In addition, this programme continued to foster, in nearly all segments, an easing of loan terms and conditions and an increase in the volume of loans granted. The negative interest rate of the ECB deposit facility contributed, over the past six months, to a decrease in the net interest income of banks in the two areas and to an increase in credit volumes.

  • 29/03/2019
    Artificial intelligence in financial services (437 KB) Ana Fernández

    The use of artificial intelligence tools has escalated recently in all sectors of the economy owing, among other factors, to the growing volume of digital data and higher computational capacity. Major benefits may be reaped from applying these tools to the provision of financial services, not only for financial institutions but also for society as a whole. This article describes some of those benefits, and also some of the main uses being made of these tools, both by financial institutions and central banks. It also indicates the main limitations of the technology and its possible implications for the correct functioning of the financial system.

  • 26/03/2019
    Results of non-financial corporations to 2018 Q4: preliminary year-end data (767 KB)

    The activity of non-financial corporations remained on an upward trend in 2018, leading to overall increases in ordinary profit (ordinary net profit grew by 5%, up 0.3 pp from 2017) and employment, which were also seen in most sectors and firms. As a result of the good corporate earnings performance, average rates of return continued to improve, and the spread over the cost of borrowing widened further. Extraordinary revenue and costs had a positive impact on net profit in 2018, resulting in strong net profit growth. Average debt ratios, relative to assets and ordinary profit, fell. Lastly, the debt burden ratio also declined, driven by the lower cost of borrowing and the growth in surpluses. A box analysing the recent developments in trade credit and average payment and collection periods is included in this article.

  • 12/03/2019
    Adapting lending policies against a background of negative interest rates (603 KB) Óscar Arce, Miguel García-Posada and Sergio Mayordomo

    Since June 2014 the European Central Bank (ECB) has placed its deposit facility interest rate (DFR) at negative levels. Against this background, the question arises as to whether maintaining negative interest rates over a prolonged period can adversely affect credit institutions’ net interest income and, ultimately, the supply of credit. Euro area banks’ responses to the Bank Lending Survey (BLS) enable the banks to be classified into two groups, depending on whether their net interest income has been impaired or not by the negative rates (“affected” versus “unaffected” banks). The analysis in this article shows that the affected banks are generally not as well capitalised. This circumstance might have hindered these banks from taking on fresh risks under their lending policy in order to attempt to offset the adverse effect of the negative rates on their unit lending margins. Indeed, the banks most affected by negative interest rates tightened the terms and conditions on their loans to a greater extent than those unaffected, to optimise their risk-weighted assets and, therefore, their capital ratios. Lastly, the article shows there are no differences between both groups of banks as regards the total credit offered and that the credit supply has been adapted via loan terms and conditions and not through the total amount offered. This result suggests that the current level of the DFR (-0.4%) is not causing a contraction in the volume of credit supplied by the banks affected.

  • 21/02/2019
    The Eurosystem’s monetary policy following the end of net asset purchases (627 KB) Óscar Arce, Galo Nuño and Carlos Thomas

    This article analyses the monetary policy conduct framework in the euro area following the end of net purchases under the financial asset purchase programme. First, there is a review of the monetary policy measures since 2014 and of the ECB’s announcements on the future course of its instruments, comparing the recent changes in euro area monetary policy with the normalisation of US monetary conditions initiated by the Federal Reserve in 2013. Second, the authors analyse the main instruments currently available to the ECB (forward guidance on interest rates and its asset portfolio reinvestment policy), and discuss how both instruments provide monetary stimulus in the current setting.

  • 12/02/2019
    The loan to value ratio for housing in Spain over the period 2004-2016 (601 KB) Olympia Bover, María Torrado and Ernesto Villanueva

    The ratio between the amount of mortgage loans and the value of housing (the loan to value ratio) is a useful indicator for studying the financial situation of households. Two main price indicators are used to measure loan to value ratios for housing in Spain at the time of purchase: the transaction price recorded at the Property Registry and the appraisal value. Having generated a sample in which both price indicators refer to the same set of housing, the median loan to value ratio between 2004 and 2007 is found to stand between 70%, when the appraisal value is used, and 107%, when the transaction price is used. The difference between these two ratios narrowed from 2010, with the loan to value ratio using the appraisal value remaining at around 70%, while the ratio based on the transaction value fell to 80%. The Spanish Survey of Household Finances (EFF), conducted by the Banco de España, is an alternative data source, allowing a loan to value ratio to be obtained directly from households’ responses. This ratio, based on EFF data, has evolved in a similar way to the one derived from the transaction prices recorded at the Property Registry.

  • 22/01/2019
    The January 2019 Bank Lending Survey in Spain (616 KB) Álvaro Menéndez Pujadas

    In 2018 Q4, according to the Bank Lending Survey (BLS), credit standards for consumer credit and other lending to households tightened slightly both in Spain and in the euro area. There were no appreciable changes in the other two lending segments. For the current quarter, Spanish banks anticipated a slight tightening in all lending segments, a development also observable in the euro area – albeit to a lesser degree – in practically all segments. The overall terms and conditions on new loans eased across the board, both in Spain and, more moderately, in the euro area as a whole. In Spain, the demand for credit fell both in loans to enterprises and loans to households for house purchase, and it ceased to grow in consumer credit and other lending to households; in the euro area as a whole, meantime, loan applications grew across the board. Conditions of access to wholesale funding markets worsened, both in Spain and in the euro area, whereas in retail markets the changes were minor and of a different sign. According to the banks surveyed, regulatory and supervisory measures in respect of capital, leverage and liquidity did not exert an appreciable impact on the supply of credit in Spain in the second half of 2018, whereas in the euro area they prompted some tightening. Finally, the NPL ratio did not exert any influence on Spanish banks’ lending policy in the second half of 2018, while in the euro area they contributed to some tightening in the supply of credit in all segments.

  • 10/01/2019
    Spanish banks’ internationalisation strategy: characteristics and comparison (414 KB) Isabel Argimón

    Banks’ international strategy and the way in which they have expanded are explanatory
    factors for the economic effects of their activity. Based on information from individual
    institutions, the internationalisation strategies of banks based in Spain, the Netherlands
    and the United States have been compared. In addition, in the Spanish case, whether
    banks’ risk, efficiency, return and income source type differ according to the chosen
    model of internationalisation has been tested. The results of this comparison point to
    Spanish banks with subsidiaries and branches abroad having higher returns but also
    higher costs than banks whose foreign business is mainly cross-border.

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